Board Certified Specialist in Bankruptcy
Mortgage modifications are rare. Modifications for second mortgages present challenges of their own. Clients who are in financial difficulty are well advised to consider a Chapter 13 bankruptcy case as an option when they are current on their first mortgage but are not paying, in full and on time each month, their second mortgage (including a home equity loan or other debt secured by the … [Read more...]
According to the Wall Street Journal, nearly 40% of homeowners who took out second mortgages are underwater on their loans, more than twice the rate of owners who did not take out such loans. Second mortgages have made it more difficult for troubled borrowers to negotiate loan modifications with lenders. Economists say borrowers with second mortgages on homes that are underwater are far more … [Read more...]
We have seen how sloppy and aggressive foreclosure processes have taken a toll on homeowners, neighborhoods and the economy in general. Last week's news of a House panel examining lapses and gaps in mortgage servicing regulation caught my attention, but I don't expect a speedy resolution. State attorneys general and the Justice Department are advanced talks with JPMorgan Chase & Co. … [Read more...]
This opinion piece by economist Paul Krugman about mortgage company shenanigans garnered 463 comments before the NYT closed the comment section. If you are trying to get your mortgage refinance or modified, you'll find plenty of company among the disgruntled commenters but not much in the way of advice. You need a bankruptcy attorney for that.Dr. Krugman endorses the Oscar-winning film … [Read more...]
Many of our bankruptcy clients who are homeowners have been in contact with their mortgage company in an effort to modify their mortgages and keep their home. Most of them are behind on their mortgage payments either because of a trial modification at a reduced monthly payment, or because they simply cannot timely pay their entire regular monthly payment.In either situation, after a bankruptcy … [Read more...]
I saw an interesting article about a Pennsylvania judge who forces the mortgage companies trying to foreclose on homes in his jurisdiction to first try and work out a modification with the homeowner. Mortgage companies cannot proceed until they have proven a good faith effort to the court.Even that's not enough to help most people save their homes. 20% of borrowers (or more) with permanent … [Read more...]
When we warn clients about the rocky road toward a permanent mortgage modification, and why bankruptcy protection may make more sense for them, they always think THEY will be the one who succeeds. Odds of seeing the Loch Ness Monster are worse, but not by much. Only 35% of applicants have received permanent modifications, and, in our clients’ experience, the permanent modification sometimes … [Read more...]
We often talk to prospective clients who hope to avoid foreclosure and bankruptcy by applying for a mortgage modification. While we always wish them the best of luck, we consider it our professional duty to inform them of what lies ahead if they apply with the Home Affordability Modification Program (HAMP).In October, Bloomberg reported on congressional hearings, which include this fact: even … [Read more...]
Sometimes when we tell prospective clients they are better off declaring bankruptcy than hoping for a mortgage modification they believe we're giving self-serving advice. Scroll to the bottom of this post for a comprehensive story from PBS's NewsHour on the modification debacle. Unemployment is the culprit Until employment improves, the housing situation will not improve. Most of the people we … [Read more...]
This week a WSJ article quoted the head of the NY Federal Reserve Bank addressed, saying “the Federal Reserve actively encourages efforts to find viable alternatives to foreclosure, like loan modifications, or deeds in lieu.” Let's take a look at each of these alternatives. How about a modification? If you CAN get a modification, and if the modification allows you sufficient room to pay … [Read more...]