BANKRUPTCY UPDATES

• Taking Your Credit Score from Bankrupt to Perfect 10 (May 21, 2012)
• Music Storage Website MP3Tunes.com Seeks Bankruptcy Protection (May 22, 2012)
• Book Publisher Houghton Mifflin Harcourt Files for Bankruptcy (May 17, 2012)
• Las Vegas Tycoon Lists $500 Million in Debts in Bankruptcy Filing (May 15, 2012)
• Nassau Broadcasting Sells its Assets in Bankruptcy Court (May 22, 2012)

Assignment of Mortgage Without Note

The housing market crash of 2008 revealed some disturbing trends in the home mortgage industry. One of the most harmful trends was the frequent shuttling of mortgages between lenders.

Often, home mortgages were assigned from one lender to a third party without a note that confirmed the mortgage transfer. In addition, homeowners were sometimes left in the dark about the sale of their mortgage and who really had a legal claim to the property.

Recently, some homeowners have challenged the assignment of their mortgages without notes. In addition, many people have filed for personal bankruptcy to stop home foreclosure proceedings.

For more information on bankruptcy's ability to prevent home foreclosure, you can connect with a local attorney for a free consultation by completing the following form:

Legal Effects of an Assignment of Mortgage Without Note

In brief, an assignment of mortgage is a document that proves a transfer of a home mortgage between a lender and a third party. An assignment of mortgage may also be required when a mortgage holder transfers a mortgage to another buyer.

When assigning a mortgage, a lender must usually:

• Notify the mortgage holder that a transfer has taken place.
• Give mortgage holders new information about where and how they are supposed to make mortgage payments.
• Adequately document the transfer through an official note.

Recently, mortgage assignments between lenders have gained some notoriety by forgoing some of these steps. Sometimes, lenders will assign mortgages several times, with important paperwork often forgotten or simply ignored.

This hole in the mortgage record causes headaches for lenders filing foreclosure claims against homeowners. It may also frustrate homeowners trying to sell their own mortgages.

Mortgage Assignments and Bankruptcy

When lenders assign mortgages without a note, or make other technical mistakes, homeowners may be able to challenge the validity of a home foreclosure.

In most cases, however, foreclosure is not prevented by such technicalities. This is why many people turn to bankruptcy to help stop foreclosure. Bankruptcy may help prevent foreclosure in a few different ways:

• Automatic stay. This stops a home foreclosure and other debt collection efforts while bankruptcy is taking place.
• Debt relief. By relieving other types of debt through Chapter 7 bankruptcy, filers may clear up funds to make overdue mortgage payments.
• Repayment plan. In Chapter 13 bankruptcy, filers can create a new payment plan, which may include missed home mortgage payments. Through this plan, filers may be able to catch up on their loans.

For more information on bankruptcy and home foreclosure, contact a lawyer close to you today.