Debtors are finding it impossible to modify most home mortgages in my area (Louisville Kentucky). Many have been unable to stop mortgage foreclosures and more of them are deciding to file bankruptcy and allow the home to go back. Often mortgage companies are only gathering financial information such as where the bank accounts and jobs are to help them to collect deficiency judgments later. Recently Fannie Mae announced that it will be collecting deficiency judgments for home mortgage foreclosures.
You may not be able to modify a mortgage or short sale your home but you are often able to force the payments upon the mortgage company by fighting the foreclosure or filing a Chapter 13 or strip away a second mortgage. There are some things that we as foreclosure attorneys often do:
- If you want to keep your home, a Chapter 13 bankruptcy can stop the home foreclosure and force the payments upon the 1st mortgage lender. Often a Chapter 7 bankruptcy will also stop home foreclosures temporarily and help you to work out a deal with your mortgage lender. Filing an answer to a foreclosure normally only delays a foreclosure process but it may also allow you time to attempt a mortgage modification or work out.
- However unless you pay the 1st mortgage, filing a foreclosure answer, Chapter 7 or 13, will only temporarily stop a home loan foreclosure. Even with a Chapter 7 or Chapter 13 bankruptcy, you will eventually have surrender the home to the lender, if you can’t repay a 1st mortgage. So it is essential that the 1st mortgage fit within a budget.
- If you’re facing home foreclosure, bankruptcy will give you time by stopping the lender from proceeding with the foreclosure process. The automatic stay is the temporary court order, that stops all foreclosures and gives the homeowner more time to workout options to their home mortgages.
- If the 1st mortgage company is not paid they will eventually ask a judge to lift an automatic stay so that they can continue with the foreclosure process. But often filing either a Chapter 7 or 13 will prompt the mortgage company to seriously begin negotiating other options.
- If you are filing bankruptcy and decide to surrender your home you will not have a deficiency or tax debt from the forgiveness of the debt. But Debtors who are filing a Chapter 13 bankruptcy may have other options such as the ability to treat a second mortgage like a credit card debt and remove the second mortgage lien.
All of these are important home loan problems you may want to talk about with your Louisville Kentucky foreclosure attorney. Allow him the ability to fight your home loan foreclosure.
Nick C. Thompson Louisville Kentucky Foreclosure attorney
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