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Don’t Fall For Your Mortgage Lender’s Insurance

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lender home insuranceIf the mortgage company provides your property insurance, you are not in good hands.

No matter how much time it saves you.

Your lender is not a good neighbor when it comes to insurance.

When your insurance lapses

Somehow my client let her homeowners insurance lapse.  She wasn’t worried about it, she told me, because the mortgage lender had gotten insurance on her home.

She was content, she said, to let the lender take care of that complication in her life.

Only the complication wasn’t being “taken care of” because the lender’s force-placed insurance didn’t protect my client or her interest in her home.

Lender protects only themselves

Normally, you pick out an insurance carrier to insure your home and to protect yourself against the risks that property owners have.

Your mortgage requires that you insure the property and name the lender as an additional insured.  That way, if the house, which is part of the collateral for the loan, burns down, the lender gets all or part of the insurance proceeds to make up for the loss of the structure.

Your mortgage also provides that if you don’t get insurance to protect the lender, they can get it for you, and you’ll have to pay for it.

But here’s the catch: force placed insurance  protects only the lender up to the amount of its loan.

Your equity in the property is not covered, nor are you insured against personal injury claims related to the  property.

Not to mention the fact that force-placed insurance is very expensive.

So, my client who thought she’d off-loaded the job of providing insurance, had no protection from the lender’s insurance.  All she had was the bill for three times what she was paying before, for half the coverage.

Homeowners exposed to injury liability

Homeowner’s insurance usually protects far more than the house on the lot.  It protects you from claims by visitors to your property for injuries they suffer on your property.

And other, quite unexpected stuff.

Early in my legal career, I found that my client’s homeowner’s policy covered the damages his son caused spinning wheelies in his dad’s car on the high school football field in the dark of night.

Our legal system assigns liability to property owners for injuries that occur on the property, often without regard to fault,.  For that reason,  I advise that people walking away from homes or investment property continue to pay for liability insurance even if they aren’t paying the mortgage and are indifferent if the property burns down.

Take insurance matters into your own hands and be genuinely protected.

More

Little known step that’s critical before listing house for sale

Your house needs an annual check up

How California homesteads work

Your home provides a poor retirement

Image courtesy of Artotem 

Is Home Equity A Substitute For Retirement Savings

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My house is my retirement plan.

If I had a dollar for every time a client said that, I could retire today.

But that approach to funding your old age only works if….

Sell your house to retire

The value in your house makes your balance sheet strong, but doesn’t put food on the table or gas in the car.

That home equity is illiquid.  You can’t write a check against it for the other necessities of life.

To get at that equity, you need to sell the house, or  borrow against it.

A traditional loan requires that you have cash to cover the monthly loan payments.  But hey, you’re not working.  Where does that money come from?

Reverse mortgage

The reverse mortgage was invented to allow seniors who can’t make monthly payments on a conventional loan to access the equity in their home.

But the fact that a reverse mortgage has no monthly payments does not mean that it’s cost free.

No, the interest on the money borrowed accumulates over the life of the borrower.  And the unpaid interest itself earns interest.  The cost is steep.

Dangers in reverse mortgages

Reverse mortgages top list of older consumer complaints

And a condition of a reverse mortgage is that you keep up insurance and property taxes.

Real property has carrying costs

Whether encumbered or owned free and clear, real property has its own set of expenses.

  • Hazard insurance,
  • property taxes,
  • repair and upkeep.

Gotta have cash for those things.  The average Social Security check is about $1300.

Where do you live if you sell

If you’ve benefited from rising home values over your lifetime as a homeowner, the cost to replace the house you’re selling has risen as well.

And buying less house in your community still has the carrying costs we talked about above.

Or you rent.  So housing still has a cost.

Or you move out of the community you live in to somewhere where your sale proceeds go further.

You move away from friends and support systems.  Or maybe you move back to somewhere where you have a support system.  It can work both ways.

Taxes shrink your equity

Capital gain taxes are triggered if you sell your home.  Current tax law excludes from taxable income $250,000 in gain for a single person and $500,000 for a married couple. (Watch for changes, here).

So taxation will deplete your sales proceeds only if you have experienced a lot of appreciation over your lifetime.

But if you’re sitting on lots and lots of equity, count on it shrinking if you sell.

Don’t hide behind your house

There are no easy or universal answers here.  Our lives are longer and our preparation for old age is woefully incomplete.

For too many people I meet, the “home is my retirement account” is an excuse for overpaying for housing at the expense of retirement savings.  It provides cover for failure to set aside any money now.

Diversification of your retirement assets is clearly best.  Have cash and home equity as you age.

But however you are situated, give some clear thought as to how you fund those decades of life when you aren’t working.

More

Do California seniors need bankruptcy

What it costs to retire here

California homestead and senior debt

Image © Fotolia

Bankruptcy Debtors Entitled To Monthly Mortgage Statements

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monthly mortgage statement

Years of uncertainty and indifference, rooted in the automatic stay and a homeowner’s ongoing obligation on their mortgage after bankruptcy, has ended with a new rule.

Mortgage servicers must now send monthly statements to borrowers in bankruptcy under a new CFPB rule effective April, 2018.   

The earlier version of the rule, adopted in 2014, allowed servicers to send no statements to consumers who had discharged their personal liability in bankruptcy or who had a pending bankruptcy case.

Now the rule creates a duty to render a monthly statement unless

  • the consumer requests the servicer stop sending statements
  • the consumer’s Chapter 13 plan provides for surrender, avoidance of the lien, or doesn’t provide for ongoing payments
  • a court order avoids the mortgage lien
  • a Chapter 7 statement of intentions indicates surrender AND no payment has been made since bankruptcy was filed

Even if an exemption to the duty applies, the consumer can opt in to receiving monthly statements by making a written request.  The request can be made by any borrower on the loan or by their agent, such as their bankruptcy attorney.

And just like RESPA Requests for Information, the servicer can designate an exclusive address to which the request must be made.

Statements tailored for Chapter 13

When a borrower is in Chapter 13, the servicer must modify the monthly statement to show the amount due as only the post petition amount.

The monthly statement must also account for the pre bankruptcy arrearages in a new category on the statement.  Required information on the arrears includes

  • amount received on the prepetition arrearage since the last statement
  • the total of all payments received since the bankruptcy was filed
  • the current balance of the prepetition arrearage

Boon to borrowers

This rule is a huge step forward for borrowers in bankruptcy.  Until this rule, there was a terrible disconnect between the borrower’s intention to continue paying on the mortgage and the servicer’s ability to avoid providing information about what is due.

FRBP 3002.1 spoke to part of the problem when it required servicers to file and serve notices of changes.  But that still left the homeowner without the monthly cue on where and how much to pay on the home loan. 

When mortgage lender changes their tune, it’s war.

The new rule goes a step further in that it requires the monthly statement to show both the state of the loan payments since bankruptcy, but also the progress toward curing any pre bankruptcy default.

Challenge to servicers

For the last 25 years of my bankruptcy practice, servicers have routinely botched the problem of accounting for payments made on mortgage loans in Chapter 13.  They have struggled to impliment a system that properly credits and accounts for payments received after filing on the continuing mortgage along side payments received on the pre bankruptcy arrears.

Even before this rule, servicers can seldom file papers with the bankruptcy court with numbers that are consistent as to the amount the debtor owes.  I’ve seen cases where a proof of claim, an objection to confirmation, and a motion for relief from stay from a lender each states a different number.

The chances for the servicer to screw up have just increased with the implementation of this rule.

I recognize that Chapter 13 presents a challenge, but servicers are in the business of accounting for money.  They need to get it right.  And if compliance makes their job more expensive, they can negotiate an increase in price for their services.

It can no longer be OK to keep borrowers who want to pay in the dark.

Thank you, CFPB.

More for borrowers

The new, improved Request for Information

Decoding your mortgage statement

Your Right To Credit Reporting After Bankruptcy

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credit report after bankruptcy

You’ve finished your Chapter 13 and emerged from bankruptcy with your home loan current.

But your credit report is a blank page as to your mortgage.

The mortgage servicer isn’t reporting your payments to the credit reporting agencies.  

Nothing. Nada.  Crickets.

So, even though you’re making regular payments, you’re not visibly rebuilding your credit.

Ask the servicer and they’ll tell you that they can’t report your payments “because of your bankruptcy discharge“.

But they are wrong:  a little-discussed provision of Chapter 13 says that long-term mortgage debt is not discharged in 13.

Yup.  The mortgage loan is not discharged as a personal obligation.

And therefore, there is no bar to the servicer reporting your payments, and every danger should they not report.

Servicer’s obligation to report

Put simply, if a creditor reported to credit reporting agencies before the bankruptcy was filed, then there is an obligation to report after the bankruptcy.  The “furnisher”, the creditor who supplies information to the credit reporting agency, has an obligation to make the information on file fully accurate.

In contrast to an unsecured debt like a credit card, which should be reported as having a zero balance after the discharge, the mortgage loan after Chapter 13 has a balance.

Presumably, it is also current.  Both facts which should appear on your credit report.

Mortgages excluded from Chapter 13 discharge

I’m certain you will have to cite to bankruptcy law when you challenge the improper reporting on a mortgage loan after Chapter 13.

Here’s the part of the Bankruptcy Code that excludes long term debt like your mortgage.

Section 1328 says,

(a)… the court shall grant the debtor a discharge of all debts provided for by the plan …, except any debt—

(1)provided for under section 1322(b)(5); 

The section that 1328 incorporates, Section 1322(b), says

(b)Subject to subsections (a) and (c) of this section, the plan may—

(5) … provide for the curing of any default within a reasonable time and maintenance of payments while the case is pending on any unsecured claim or secured claim on which the last payment is due after the date on which the final payment under the plan is due;

Get mortgage payments reported

If you find that your post discharge payments on your home loan aren’t being reported, challenge the accuracy of what is on your report about that loan with the credit reporting agency.

It is the CRA’s responsibility to see that information in your credit file is accurate.  The CRA is supposed to ask the furnisher to reinvestigate the challenged tradeline.

The Consumer Financial Protection Bureau has a how-to, with a template letter, on how to dispute inaccurate information on your credit report.

Get the good information reported.

More

How to find and fix credit reporting errors

Your post bankruptcy to-do list

Home Remedies For Foreclosure Breed Bankruptcy Tragedies

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Warning: virulent outbreak of do-it-yourself bankruptcies all around.

Symptoms:  panic over prospect of foreclosure

Supposed remedy:  file your own skeleton Chapter 13 bankruptcy

Prognosis: enjoy the stay for about 2 weeks, followed by foreclosure relapse

Homeowners facing foreclosure

Three different would-be clients called in a 10 day period this month, facing foreclosure.  And all three had the same tragic, but avoidable story.

I was on the trail of an epidemic.

Each had filed an emergency bankruptcy petition to address a looming foreclosure.  They then did nothing to file the balance of the schedules necessary in their cases.

How dismissal differs from discharge

Without schedules,  the case was dismissed, automatically. No court hearing, just tossed out for failure to follow the order that says “you’ve got two weeks to file the rest of the papers”.

And they did the same thing all over again a little bit later, again filing only the bare minimum of paperwork, before the second case is dismissed.

With two cases dismissed in the past 12 months, there will be no automatic stay in a third case.  The  bankruptcy won’t prevent the lender from foreclosing.

As a bankruptcy attorney, my bag of remedies was essentially empty.

Why homeowners sucked in

I understand the appeal of the automatic stay: it’s a lynch-pin of bankruptcy relief.

The automatic stay is powerful:  it applies to all creditors, it makes actions in violation of the stay void, and it becomes effective instantly upon filing bankruptcy.

The necessary paperwork to initiate a case is minimal, and the filing fee is just over $300.

Pretty seductive if you are panicked about losing your home.

Multiple filings labeled abuse

The pattern of debtors filing, getting dismissed, and filing again irked lawmakers back when the last round of bankruptcy amendments passed Congress in 2005.

After “reform”, every debtor gets a stay in their case.

File a second case within 12 months after the first was dismissed, and the stay lasts only 30 days.  The court will consider extending the stay if the debtor applies and gets an order within that 30 days.

File a third case, after two dismissals within 12 months, and there simply is no stay.

Chapter 13 can save your home

The tragedy in all of this is that Chapter 13 works, if you want more than just a two week stay.  Few problems that threaten foreclosure can be solved in two weeks.

How 13 can save your home

Understand that letting your case be dismissed cripples your  ability  to use bankruptcy in another case.

More

What should bankruptcy cost

How to interview a bankruptcy lawyer

Don’t wait til the day before foreclosure

Image courtesy of torange.biz.

Getting Rid Of Junior Home Liens In Bankruptcy

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One of Chapter 13’s superpowers is its ability to strip off otherwise valid, voluntary liens on a home.

Ordinarily, liens survive a bankruptcy discharge as a charge on the collateral;  it’s the borrower’s personal liability that is wiped out.

But Chapter 13 allows the elimination of liens when the lien isn’t really secured by any value in the collateral.

Rules of lien stripping

This is law, so you knew there’d be rules:

  1. A voluntary lien, like a deed of trust securing a second loan, line of credit, or HELOC, can be voided only in Chapter 13 or Chapter 11.
  2. It can be stripped only if there is no equity in the property after deducting the payoff balances of the liens senior to the lien from the fair market value of the property.
  3. The lien is permanently voided only upon the successful completion of the reorganization plan.

Thanks to lobbying by the mortgage lenders more than twenty years ago, bankruptcy courts are prohibited from compelling any changes to mortgages liens secured only by the debtor’s home.

So, the work-around, if you like, is a finding by the bankruptcy court that the junior lien isn’t really “secured” by any value in the home.  If it’s not secured, the prohibitions don’t apply.

If there is a dollar’s worth of equity in the property, the lien must remain. A dollar out of the money, and the whole lien is gone.

Limits on bankruptcy relief

As a result of the limitations imposed by Congress, the help for homeowners that bankruptcy reorganization provides is limited to voiding totally unsecured liens and to eliminating other debts of the homeowners.

Limitations don’t apply to real property not acquired to be the borrower’s principal residence

Neither can the bankruptcy court  require the senior lender to modify a mortgage or to defend its decision to reject a modification.

Legislation passed by the House of Representatives in 2009 would have overturned the prohibition on modifying home loans and allowed judges to reduce mortgage balances to the present value of the home and alter other terms of the loan if the borrower was willing to file bankruptcy and successfully made the plan payments. The Senate defeated the bill, so bankruptcy judges remain powerless to weigh in on the tug of war between the mortgage bankers and the homeowners.

As always, you need to determine whether you should keep the house. and what the viability of a modified mortgage is.

You’ve got choices for a house even after you file bankruptcy.

Stripping off judgment liens

Eliminating tax liens

Cancel by Nick Youngson CC BY-SA 3.0 Alpha Stock Images

 

No Foreclosure If Loan Modification In Process

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foreclosure roofline 650 taberandrew

The cruelest trick played on homeowners trying to modify their mortgage was dual tracking.

One side of the bank assured the borrower that their loan modification application was being considered and they didn’t need to worry.

All the while, the other side of the bank was conducting a foreclosure sale.

The borrower wakes up to find that they are no longer homeowners.

No more.

New federal rules prohibit dual tracking

Mortgage lenders are now prohibited by federal law from conducting a foreclosure while a mortgage modification application is under consideration.

Regulation X – Real Estate Settlement Procedures Act

Before a foreclosure is begun, the lender or their servicer must take steps to let the borrower know what options exist to keep the house.  The mandated timeline creates a four month interval between delinquency and starting the foreclosure in which alternatives can be explored.

Live contact with borrower

Mortgage servicers must attempt to make live contact with borrowers who become delinquent within 36 days of the delinquency.  A voicemail message doesn’t cut it.  Reg. X §1024.39

The servicer must describe the kinds of loss mitigation options that are available and they must establish a single point of contact for the borrower with the servicer.  Reg. X § 1024.40

No foreclosure can be instituted until 120 days have passed from the first delinquency.  More importantly, if a complete loan modification application has been submitted to the the servicer by the 120 day point, no foreclosure can be begun.  Reg. X §1024.41

Last minute help

If the borrower misses the 120 day deadline for submitting a loan modification application, there’s still protection in the new rules.

If a loan mod application is made more than 37 days before the foreclosure sale, the servicer cannot conduct a foreclosure sale until it issues a decision on the application.

The new rules deal with a myriad of variations on these timelines.  The theme in the rules is consistent:  federal law requires a decision on a loan modification application before the foreclosure train chugs down that track.

If the servicer breaks the rules

The new rules have teeth.

Borrowers who believe their servicer has failed to follow the rules can sue the servicer.  If you can prove your case, you can collect your actual damages as a result of the violation; your costs of suit; and your attorneys’ fees.

These regulations implement provisions of the Dodd Frank legislation; they became effective January 10, 2014.

Another arrow in homeowner’s quiver

These rules do not preempt other rights that homeowner’s have in this arena that give them greater rights.

Like any new law, we will have to see how they work over time.

While the rules don’t require servicers to modify loans, they do require servicers to refrain from foreclosing while a loan modification application is pending.

Image courtesy flickr and taberandrew.

The Worrisome Truth About Silent Second Mortgages

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silent mortgagesLike a sleeping bear, long-silent second mortgages hibernate in people’s houses these days.  They are quiet, a snoozing predator, just waiting for spring.

And it can be bloody when those sleeping mortgages awaken hungry and look around for something to fill its pocket.

Here in California the coming slaughter is particularly noticeable because the value of real estate has rebounded to 2006 levels and beyond in many areas of the state.

Waves of foreclosures have now started lapping on the financial beach just as the federal government declares that everything is coming up roses for the economy.

These foreclosures are kin to the FIRST WAVE that devastated the nation. Both were triggered the largest financial fraud in US history. (A massive systemic fraud the US taxpayer was obliged to finance while being victimized.)

The current wave of foreclosures involves the “Sleeping Giant Second Mortgages” on millions of homes across the country.

“I Thought It Went Away”

For more than half a decade, the gigantic financial fraud carried out by Wall Street and the lending industry jack-hammered real estate prices to such low levels that second mortgages had no chance of receiving a penny if they foreclosed.

Worse still, if they foreclosed, they would be saddled with paying a first mortgage that was no longer fully secured by the value of the real estate. In the icy financial winter that followed, many second mortgages holders took the “long nap”.

Second lenders stopped calling the homeowner. They stopped sending the homeowner ANY notices relative to their second mortgage(s). They hibernated.

Here in California many second mortgage holders went even further.

They told homeowners typically over the phone that the lender had “charged the loan off their books”. Then the lenders coupled this a form 1099-C. (Sometimes a 1099-A, or my personal favorite, the form 1099-MISC which is an absolute outrage. We’ll talk about form 1099(s) issues by the lending industry in another article soon.)

What was a homeowner to think? “They didn’t call”…”They didn’t write”…”They charged it off”…”They sent out a form 1099 for debt cancellation.”

Homeowners by the millions concluded “It went away.” But it didn’t.

A Second Mortgage isn’t a Puppy that Follows You Home

You aren’t getting a “free” loan that you don’t have to repay because the lender needs to show you the note or because MERS is illegal.

Don’t waste your time on this nonsense.

In California the horrible truth is that EVEN the issuance of a form 1099 for debt relief in the situation described above, DOES NOT, in and of itself, mean the debt has been cancelled within the meaning of Section 108 of the Internal Revenue Code.

It can simply mean a particular lender has written the debt of their books. In all probability it means the debt was sold to someone else to collect. (They virtually always end up in the hands of another creditor.)

If there is a recorded deed of trust or mortgage instrument, and there virtually always is, the loan is a secured loan.

A loan secured by real estate is just about the best form of long term debt anyone can hold DEPENDING ON THE VALUE OF THE REAL ESTATE.

So when the value of real estate began to go up decisively, these secured second mortgages begin to “bloom” like California Poppies in spring.

When the Second Mortgage Wakes Up, You Need To

mortgage lender awakenedWhen a second mortgage holder comes out of hibernation, they are typically ravenous.

Like a grizzly bear with an empty stomach, they will initiate foreclosure and eat your home with little ado. It is a very good bet the lender is well versed as to the current value of the real estate and will feel quite confident that they can obtain the yield necessary to make the process worth their while.

Actually it’s much better if you “wake up” before the second mortgage holder does.  You almost always have better options if you face this problem as early as you can.

There are still rare cases in which the value of the property currently is less than the first mortgage.  If so, a Chapter 13 bankruptcy can be used to strip off the second and discharge it for virtually pennies-on-the-dollar while the homeowner retains the house.

If the house still has a very depressed value the homeowners may be able to  negotiate a reduced settlement figure and permanently cancel the debt. (In which case a form 1099 should be expected for the tax year in which the note is cancelled in exchange for the reduced payoff.)

There may be other moves a homeowner can make, like using a bankruptcy to catch up all the missed payments on a sleeping second. I hate this one but in the case of folks who can afford the payments, and who want to keep the home, this may be viable.

Sometimes it’s time to sell the house. I like my homeowners to sell their homes at premium prices long before some “snarling second” files a Notice of Default (N.O.D.) artificially depressing the value of the real estate.

Avoid a Notice of Default if You Can

If at all possible, don’t let a second mortgage holder get to the point where they have filed a Notice of Default before you take action.

You are then on the defensive and your options dwindle with each passing day. Worse yet, lenders will deliberately engage you in fruitless dialogue to try to draw out the time until they can sell your property.

I’ve seen this type of violation of the duty of good faith and fair dealing by lenders over and over again. Almost none of the dialogue will be in writing and it’s hard to prove in court.

Especially don’t wait until a date has been set to sell your property.

In California the non-judicial foreclosure train has left the station once an N.O.D has been filed. There are only three general methods to “stop or slow” this train.

Each method has its benefits and burdens. Often one or more of the methods are practically impossible for the homeowner to utilize.

You need to start early. There are no EASY ANSWERS.

But there are more options and better answers the sooner you shake off your winter slumber and sneak up on the sleeping giant in its lair.

Guest author Bill Purdy is a tax and real estate lawyer with Simmons and Purdy in Soquel, California.  He and his partner Pam Simmons are my go-to resource for all matters of tax and mortgage law.  I’m tickled to share Bill’s pointed perspective on California mortgage law.

Know What You Really Owe: Your Mortgage Loan Rights

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house check stockmonkeys dot com_optYou’ve got a lot to keep an eye on.

You probably regularly check

Your blood pressure.

Your credit report.

Your stock portfolio.

Your bank balance.

Your team’s standings.

Yet chances are, your home is your biggest investment and perhaps even the cornerstone of your retirement plan.

But you have no idea what lurks in the file of your mortgage lender or its servicer.

Questions to ask the servicer

Where is the lender applying your payments?  To principal and interest?  To fees? Or is the money held in suspense?

Does the monthly mortgage statement you see match the records on the servicer’s computer?  You would assume so, but assume at your peril.

Got a mortgage modification?  Who knows what the lender’s records look like.  A client recently asked for a loan payoff and the response was off by $127,000! The full story.

You need to know what the servicer is doing with your payments soon enough to fix it.

  • While you still have records, and recollection.
  • While the loan is still serviced by the current folks.
  • While you have time to fix errors.

How lenders get away with theft

Nasty questions about your mortgage balance usually come up when time is short:  sale or refinance.

The payoff demand isn’t requested from the mortgage lender til the deal is about to close.  The rate lock on the enabling loan is set to expire.  The lender’s payoff demand comes in laden with unexplained fees and charges.

And you have no time to find out what’s in the demand without imperiling the deal.

While you can always pay the demand and dispute it later, that seldom seems to happen. Borrowers roll over and assume either the lender is right or it’s too difficult to get the real analysis of the payoff demand.

CFPB to the rescue

As part of the Dodd-Frank financial reforms, the Consumer Financial Protection Bureau has given homeowners a spanking new tool to keep track of their mortgage:  the Request for Information.

The Request for Information improves on the long-standing Qualified Written Request.  The QWR took too long, could only be sent to a single, designated address, and often required the borrower to know what was wrong with the accounting before writing.

A RFI allows you to simply ask questions:

  • what is the payoff balance of my loan
  • what is the principal balance of my loan
  • what fees, expenses or charges have been added to the loan
  • is any money held in suspense
  • how have you applied my payments

The servicer can set up a special address for such requests.  You can get that address from your mortgage statement; the servicer’s website; or by calling the servicer.  But you can’t make a Request for Information over the phone.

Your request has to be on paper separate from your payment coupon or mortgage statement.  Your letter should provide

  • address of your property
  • names of the borrowers on the loan
  • account number

The servicer must acknowledge receipt of your request within 5 business days, and provide responses within 30 business days.

The CFPB has a RFI fact sheet including a sample letter.

Ask annually

Make a mortgage checkup a yearly thing.  Pick a holiday or an event that you can associate with making a request for information.  Perhaps every year on the summer solstice, you make a request for information about your home mortgage.

Save the responses you get so you can compare this year to last year.  Are they consistent?  Any unexpected change?

After all, information is power.

More

How to claim a tax deduction for mortgage interest in your Chapter 13

Is your home equity an adequate retirement plan?

Understanding your mortgage statement

The one thing you must do before listing your home for sale

Image courtesy of  www.stockmonkeys.com

 

How 13 Works To Save Your House From Foreclosure

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save house

Saving a house from foreclosure is the single reason most people file bankruptcy.

Bankruptcy stops foreclosure- that’s a given.

But then what?

How can bankruptcy save the house,  rather than just putting off the inevitable loss?

The mortgage lender has a lien on the house, and liens aren’t discharged in bankruptcy.

So, how does bankruptcy help?  Meet Chapter 13 of the Bankruptcy Code.

Chapter 13 bankruptcy is the chapter of choice if your goal is to keep living in the house, as opposed to selling it to realize equity or to avoid the credit hit of a foreclosure.

Chapter 13 imposes a payment plan on lender

Baked in to Chapter 13 is the power to cure defaults on long term debts like mortgages.

Gone is the ability of the lender to refuse to take catch-up payments or to insist on cure in a single payment.

This is federal law, and the homeowner is at the helm of this ship. [Read more…]

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Suite 403
Redwood City, CA 94063
Phone: (650) 694-4700

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