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Monday, July 6th, 2009

Foreclosures Spreading to Prime Mortgages ~ When Will It End?

In what many consider an inevitable shift in the foreclosure crisis, prime, fixed-rate mortgages made up the largest portion of new foreclosures, according to a report issued by the Mortgage Bankers Association.

This was the first time for such numbers since the subprime lending boom began.

The Best-Laid Plans

Sources suggest that two major factors are contributing to the upswing in prime foreclosures:

  • Rising Unemployment: Though the unemployment rate for those with some type of college degree is 4.4 percent (compared with an 8.9 percent rate overall), this number represents a significant jump from a year ago, when unemployment among the college-educated was just 2 percent. This means that some families who counted on sustained income to keep their houses are now struggling to make payments – or finding they cannot.
  • A Glut of Unsold Homes: Because so many houses are currently on the market, selling a house has become a serious challenge, especially for those with bigger mortgages. This means that many of those struggling to pay off debts because of job loss cannot even raise money by selling their houses – the demand for real estate is currently very low.

Time to Buy, Not Sell

As you may already know, it’s a great time to buy a first home.

The sheer quantity of homes on the market means you’ll have a lot to choose from, and the current interest rates favor the purchasers rather than the vendors.

But if you’re looking to sell a larger (rather than a “starter”) home, you may not be so lucky.

Those who may be pushed by tantalizing interest rates to buy a home sooner than they would have otherwise likely won’t be interested in large, elaborate homes – especially in light of the cautionary tales told over and over by those suffering from the current foreclosure crisis.

When Will It All End?

Experts have predicted a variety of timetables for the prime foreclosure crisis.

The least optimistic among these put the crest two years for now, with steady foreclosure action well into 2012.

And Making Home Affordable, the foreclosure-prevention plan introduced by the Obama administration has reportedly only helped about 17,000 homeowners to date – far fewer than the seven to nine million who could benefit from the program, according to its Web site.

If you’re concerned about losing your home to foreclosure, it may be time to speak with one of our sponsoring bankruptcy lawyers about filing bankruptcy.

Chapter 13 bankruptcy designed to stop foreclosure. Talk to a bankruptcy attorney about filing bankruptcy.

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Posted in Mortgage Foreclosure | No Comments »

Saturday, June 27th, 2009

Michael Jackson, Neverland Ranch and Foreclosure

When ambulances were called to Michael Jackson's home last Thursday, they went to the Beverly Hills mansion he had been renting.

Jackson's most famous residence, the lavish, one-of-a-kind, amusement park-like Neverland Ranch, hadn't been his home for many years.

Amazing pictures of Neverland Ranch.

Jackson purchased the property in 1987 for almost $20 million. At the time, it was a working ranch, but under Jackson's care it would become a shrine to the childhood Jackson never had. From nineMSN:

The singer spent $35 million improving the property, which featured two railway lines, two helicopter pads, its own fire department, a zoo and a plethora of amusement part-style rides. The property cost an estimated $10 million a year to maintain.

Jackson lived at the ranch for many years, and underprivledged and sick children from California and across the country came to visit his theme-park.

But all the while Jackson was very private about the property. Visitors weren't allowed to take pictures inside, and they were required to sign confidentiality agreements upon arrival.

Perhaps the most intimate view of the property came from a lengthy 20/20 report that highlighted some of the property's extraordinary features.

Foreclosure on Neverland Ranch?

But the joy of Neverland Ranch, named after the magical land in "Peter Pan" were children never grew up, wouldn't last.

Jackson had an almost $25 million loan out on the house. In 2007, he was $23 million delinquent on the loan and foreclosure proceedings began.

In California, after you miss three mortgage payments in a row you have 90 days to make a payment. Jackson, who hadn't released an album since 2001, was unable to make a payment.

For most people, this would have been the end of the line. For most people facing imminent foreclosure, filing bankruptcy is the best option for protecting their home. Of Course, Michael Jackson isn't most people.

Jackson's celebrity helped stop foreclosure. His debt was transferred to another loan company, and the property stayed with him.

However, Jackson continued to have money problems. The zoo and many of the amusement park rides were auctioned off. With money problems and child molestation charges - stemming from a child's visit to the ranch - Jackson said he could no longer feel at home there.

And then the man who had already spent so many nights in hotels across the world while on tour, began living elsewhere.

At the time of his death Neverland Ranch was still in Jackson's possession. Today, the property is valued somewhere between $90-120 million. With his death, the property may be worth even more.

But with Jackson's debts rumored to be near $500 million, the property could be auctioned off to pay his creditors. Others, however, say that the property may become a museum similar to Elvis Presley's Graceland.

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Posted in Mortgage Foreclosure | 2 Comments »

Monday, June 22nd, 2009

Your Second Mortgage Debt Could Potentially be Dismissed by Filing Bankruptcy

What type of debt you have can make a big difference in how bankruptcy can affect your debt.

Generally speaking, unsecured debt is more likely to be dismissed - that is, retired completely - than secured debt.

And, your debt is usually either secured or unsecured, one or the other. So stuff like credit card debt and payday loans are considered unsecured, because ther'es no property attached to them.

Car notes and mortgages are secured debt, because they are connected to a property.

However, as columnist and attorney Ronald H. Surabian points out in the Burlington Union, second mortgages are a different story. After attending a recent workshop he wrote:

The thing that I found interesting about the Chapter 13 bankruptcy proceedings is that second mortgages, home equity loans and the like can be wiped out if these second mortgages are considered unsecured.

And this is something that we even overlook here. We often speak of how filing bankruptcy may help your credit card debt or mortgage, but we don't often discuss second mortgages.

Perhaps we should be because millions of homeowners have a second mortgage - often taken out to fund home repairs or improvements - and are now struggling to make that extra monthly payment.

So, is your second mortgage unsecured and, therefore, potentially able to be dismissed by filing bankruptcy? Surabian provides a clear example:

Assume the fair market value of your home is $370,000 and you have a first mortgage of $376,000 and a 2nd mortgage of $95,000. The second mortgage will be treated as unsecured and will be treated in the same way as credit cards. It will either be wiped out or paid off for pennies on the dollar.

There you have it. If you're facing foreclosure because of a second mortgage and other debts, then bankruptcy may be able to save your home.

To see if your second mortgage is considered unsecured, speak with a local attorney about filing bankruptcy.

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Wednesday, May 13th, 2009

Foreclosures Rise Again in April

According to the latest report from RealtyTrac, foreclosures jumped again in April.

CNNMoney.com reports that 342,000 U.S. homes received default or auction notices or were in the process of bank repossession last month.

This translates to one in every 324 U.S. homes involved in some part of the foreclosure process, a number which represents a one percent increase from March and a whopping 32 percent increase from the same time last year.

Here are some hard numbers that paint a picture of how serious this news is for American homeowners:

  • April numbers are the highest ever recorded by RealtyTrac in more than four years of monitoring such figures.
  • Since the start of the real estate bust cycle in August of ’07, more than 1.3 million homes have been foreclosed upon.
  • RealtyTrac’s original forecast of 3.4 million foreclosure filings for 2009 will likely be revised upward after April’s statistics.
  • Though foreclosures are a problem nationwide, 10 states were home to 75 percent of all filings (California, Florida, Nevada, Arizona, Illinois, Ohio, Michigan, Georgia, Texas and Virginia).

Dipping Home Prices Compound the Problem

Some experts are concerned about the effect falling home values will have on future foreclosure rates.

As housing prices keep decreasing, more and more borrowers find themselves “under water” on their mortgages (they owe more than their homes are worth).

This has reportedly led to an increase in people simply walking away from their homes and handing their keys over to the bank, and will likely mean missed payments and defaults for those who choose to stay.

Bank Repossessions Down – For Now

April’s bank repossession numbers actually decreased 11 percent from March, according to sources.

But this isn’t a trend that’s likely to continue: bank repossession is the last stop on the foreclosure train, and as more and more houses enter foreclosure proceedings, more and more will have to complete them in the future.

Chapter 13 Bankruptcy & Foreclosure

If you are one of the many Americans facing the threat of foreclosure, filing for Chapter 13 bankruptcy may provide you some of the relief you need.

Thanks to the protection of the automatic stay, all creditor collection actions (including garnishment, repossession and foreclosure) are typically halted for the duration of your case.

Many filers find that Chapter 13’s three- to five-year repayment plan offers them the time and breathing room they need to get current on their mortgages or at least make alternate living arrangements.

More filing bankruptcy information.

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Thursday, April 30th, 2009

Sad Day for Many Homeowners: Senate Slaps Down Anti-Foreclosure Bill

The Senate voted 45-51 against Dick Durbin's anti-foreclosure bill. Twelve democrats opposed the bill.

We were hoping the Senate would help deal with the massive foreclosure epidemic and pass the bill, which would have allowed bankruptcy judges to adjust the terms of mortgages of people who were facing foreclosure, among other things.

Obama made public statements saying the bill was an important aspect to helping the economy; however, it's been speculated that he didn't throw in 100% support because banks  opposed to the bill's passage.

Here's a quote from the Associated Press article posted on the Kansas City Star on Obama's support or lack thereof:

"Obama long has backed the proposal to give debt-ridden individuals the option of turning to bankruptcy to save their homes. He cited that support last fall as he privately lobbied skeptical Democrats to back the $700 billion Wall Street bailout. And once he was president, he had promised, he would push for its passage."

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Posted in Legal Info, Mortgage Foreclosure | No Comments »

Wednesday, April 29th, 2009

Helping Families Save their Homes in Bankruptcy Act Up For Vote

We wrote about Illinois Senator Dick Durbin's bill when it was first being considered.

Now, the measure that would potentially stop foreclosure for millions of Americans by allowing bankruptcy judges to change the terms of a mortgage - including interest rate and principal owed - is up for a vote.

However, the vote is going to be very close.

If you want to stand up and help keep people in their homes and protect Americans going through difficult financial times, contact your Senators and Congress people today.

You can visit http://www.congressweb.com/cweb4/index.cfm?orgcode=nacba&hotissue=1 to find a simple form that will allow you to contact the Senator in your home state.

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Thursday, March 12th, 2009

The Wrong Voices are ALWAYS Heard

Remember in elementary school choir how there was always that one kid who couldn't carry a tune, but who belted out every song and made sure everyone heard him?  Unfortunately, the same thing is happening in the political process today--lobbyists don't have the best interests of the country (and certainly not of the average person) at heart, but they're singing out loud and clear and everyone is hearing them.

The banking and consumer credit industries spent a decade and a hundreds of millions of dollars to pass the Bankruptcy Abuse Prevention and Consumer Protection Act in 2005...an act which has been almost universally assessed to cause far more trouble than it's worth without effectively achieving any of its intended purposes.  Today, that same lobby is at work again, trying to prevent Congress from correcting a strange inconsistency in the U.S. Bankruptcy Code--one that will impact millions of people who have never even considered filing bankruptcy.

That's right.  It doesn't matter whether or not you ever plan to file for bankruptcy--if you own a home, or rent a home, or live in a neighborhood where there have been a lot of foreclosures, or hope to buy a home, S. 61 will affect you.

If, that is, it ever sees the light of day.

The bill, whose companion bill passed the House of Representatives last week, would allow bankruptcy judges to modify mortgages in bankruptcy court.  The banking industry wants you to think that's radical, but in fact right now virtually any secured debt (car loan, vacation home, commercial real estate, etc.) can be modified in bankruptcy court EXCEPT for the loan secured by the debtor's home.

With an estimated 8 million + foreclosures in the pipeline over the next few years, this provision could slow or even stop the slide in the housing market, make it possible for homeowners to stay in their homes, and stabilize housing costs.  Even homeowners who DO NOT FILE BANKRUPTCY will see those benefits, as mortgage holders will have a new incentive to renegotiate rather than institution foreclosure proceeedings.

Right now, the banking industry, mortgage holders...the very people who created this mess over the past decade...are singing loudly--they're being heard.  They have the loudest voices, but there are far more of us than there are of them, and hundreds of thousands of soft voices can add up to a roar.

Please take a moment to let your Senator know that you support the mortgage modification bill, S. 61.

You can find contact information for your Senator here:  http://www.senate.gov/general/contact_information/senators_cfm.cfm

It only takes about a minute to make this phone call or to send an email, but it could make a lasting difference to someone you know!

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Posted in Bankruptcy News and Events, Mortgage Foreclosure, Setting the Record Straight about Bankruptcy | 1 Comment »

Wednesday, March 11th, 2009

Death and Debt Collectors

In today's economy, budgets are tight in many households. While people are losing their homes to foreclosure and their jobs to the financial crisis, life marches forward.

In addition to financial stresses, family obligations and emergencies can't be avoided.

When a Loved One Dies

The loss of a loved one is devastating.

In addition to the emotional and psychological pain, the financial pain can also be great.

If the deceased had no insurance coverage to cover funeral expenses, it’s typically the responsibility of the immediate family to cover the cost.

This can add an extra burden to a family who may already be struggling.

Debt Predators

At least one company is now actively pursuing payment for debts of the deceased, according to The New York Times.

Some grieving family members are receiving collection calls from DCM Services in New York.

DCM Services employs debt collectors to call relatives of deceased debtors and ask if they would agree to settle the deceased’s balances on credit cards, loans or other final bills—even though the family often has no legal obligation to do so.

Unfortunately, many people don’t know that.

DCM uses this to their advantage.

How Debt Predators Find Their Targets

The collection company uses carefully crafted tactics and scripts to convince a large number of people that coughing up cash they don’t owe is the right thing to do.

The collection agency has been so successful in convincing people to pay up, collection efforts on accounts of the deceased are becoming a bigger trend.

How They Do It

The company first checks nationwide probate court databases to find out if the deceased person has an estate open.

If so, the company may file a claim against the estate and attempt to have the debt settled through the probate court.

However, in cases where there’s no estate, calls are made directly to the next of kin with condolences—and an appeal for them to settle the deceased’s debts.

Debt collectors at DCM receive specialized training to prepare them to confront family members with a loved one's burden of debt and teach them to play the morality card when boldly asking for payment.

Many people don’t know that they don’t have any obligation to satisfy the debt but they agree to pay because they believe their loved ones would have wanted them to, or to avoid any suggested legal or credit problems.

The Facts

In general, unless a family member is a co-signer on an account, they’re not legally responsible for the debts of their deceased family member.

In most cases, there’s no risk of a family member being penalized for refusing to pay a debt left behind by the deceased.

But, unfortunately, this fact is artfully omitted during the collection calls, unless the family member asks the debt collector firmly and directly about their legal obligation to pay.

Learn more about how filing for bankruptcy may help stop creditor harassment.

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Posted in Bankruptcy and Predatory Lending, Financial Literacy, Mortgage Foreclosure | 1 Comment »

Wednesday, March 4th, 2009

Speak Out to Save Homes from Foreclosure

A foreclosure occurs every 13 seconds, according to the Center for Responsible Lending.

It’s time to stop the madness.

The Helping Families Save their Homes in Bankruptcy Act, H.R. 1106, aims to do just that.

The bill would allow bankruptcy judges to modify the terms of mortgages, which could potentially help millions of people save their homes and repay their past-due debts.

What You Can Do to Help Save Homes from Foreclosure

It’s time to take part in the democratic process. Tell your elected official you support passage of H.R. 1106.

It’s simple. Take 20 seconds to fill out a form that will e-mail a prewritten message (that you may edit) to your official or call a toll-free number to tell your representative’s office directly.

E-mail: Fill out the 20-second basic form and click “Send E-mail.” www.nacba.org/TellCongress

Call: Phone 877-354-4958 (9 a.m.-6 p.m. EST only). You’ll be told specific suggestions for the substance of your phone conversation and then you’ll be asked to enter your ZIP code to be connected to your representative.

Spread the Word!

Pass this on to friends, family and colleagues. It’s important that our voices are heard when it comes to filing for bankruptcy.

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Posted in Bankruptcy Filing Requirements, Mortgage Foreclosure, Setting the Record Straight about Bankruptcy | No Comments »

Wednesday, February 11th, 2009

How Can Filing for Bankruptcy Stop Foreclosure?

If you’re one of the millions of Americans in danger of losing your home, you’re likely at your wits’ end trying to hang on to the place you live.

We don’t have to tell you that saving your house is worth the time and effort. When examining options for saving your home, you may find that Chapter 13 bankruptcy may be the first step in protecting your biggest asset.

The Power of the Automatic Stay

When you file bankruptcy, something called the “automatic stay” goes into effect.

This stay prevents your creditors from taking any collection action against you. Foreclosure is considered a kind of collection, so foreclosures are halted when you file for bankruptcy.

This stay continues working throughout the duration of your bankruptcy case, as long as you adhere to the guidelines set by the court.

Protecting Your Home

Filing bankruptcy can be just the first step in stopping foreclosure. Be sure to take these measures when dealing with foreclosure and bankruptcy.

Talk to a bankruptcy lawyer.

Your bankruptcy lawyer can not only help you figure out whether bankruptcy makes sense in your case, but also keep you updated on the latest foreclosure defenses around the country.

Take action.

You may feel intimidated to contact your lender – or even your lawyer – but you shouldn’t! Remember, your home is at stake here, and staying quiet when you have questions or concerns will get nothing done. Speak up early and often to learn as much as you can about the future of your home.

Read up.

TotalBankruptcy.com offers a wealth of bankruptcy information . Learning as much as possible about what to expect from both will help you prepare for the road ahead.

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