I Owe More than My House is Worth and Waiting on the Bank to Threaten Foreclosure --- What Can a Homeowner Do?
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The United States is going through one of the worst recessions since the Great Depression. Bankruptcy filings have increased, unemployment is high and home values have decreased exponentially since 2007 highs. Many home owners are finding they have a lot of debt, a house that is not worth what they owe, no ability to refinance and no ability to sell a home because they owe more than it is worth.
It may seem like a home owner is left with no option except to quit paying their mortgage, allow a foreclosure and file bankruptcy. However, if the home owner has the ability to avoid bankruptcy, if the house could go away, there should be options besides bankruptcy.
First, bankruptcy is an option that allows the homeowner to keep the home. If a home owner wants to keep the home, then a Chapter 13 bankruptcy can allow the homeowner to file bankruptcy, catch up on their missed payments and possibly even reduce the amount that the homeowner owes on the home. This is called a “cram down” and can have significant benefits helping a homeowner keep the home at the value that exists in today’s world.
The home owner may also be able to give the home to the bank, avoiding foreclosure, and the extra costs that often get tacked on to the mortgage because of the bank’s attorney fees, collection costs and the ongoing interest the mortgage allows the bank to collect. This process is called a Deed-In-Lieu and although bank’s put up significant barriers to avoid a Deed-In-Lieu, it is possible. Sometimes the bank will ask for the homeowner to make small payments toward the difference in the home’s value and the balance of the mortgage, but an experienced attorney often can negotiate the amount of the deficiency and the payment amount and term, to give the homeowner the financial relief they are seeking.
A third option is a short sale. With a short sale the homeowner obtains permission from the bank to sell the home to a third party for less than the balance owed on the home. This is not a quick process, but an experienced short sale attorney can help expedite the process by having the short sale prepared and the discussions with the bank; so that when an offer is made on the home, the bank has the information needed to evaluate the proposed sale and get an answer back to the homeowner on allowing the sale.
Having financial difficulties with an underwater mortgage should not leave a homeowner with only the option of allowing a foreclosure on the bank’s terms. An experienced attorney can help facilitate some other deal with the bank, delay any foreclosure and give a homeowner the ability to feel in control of the process. Often times, if the homeowner wants the attorney and Realtor can help save the home.
ABOUT THE AUTHOR: Jason P. Wischmeyer
Throughout his 10 year career as an attorney, small businesses and large corporations hire Jason to pro-actively evaluate and advise them on legal matters ranging from contract preparation, human resources, debt collections and general business management consultation. Insurance companies seek his help with first and third party defense cases and insurance coverage matters. Men, women and parents have received settlements and won jury verdicts for car accident and medical malpractice injuries and death For people with debt issues, Jason obtains them a fresh start through negotiations with creditors or filing Chapter 7 or Chapter 13 bankruptcy. National and local attorneys refer their business and individual clients to Jason for representation in Indiana knowing their client's legal matter will be handled cost-effectively and the client will obtain results. Mostly, Jason assists individuals, small businesses and large corporations find legal solutions for their lives and businesses.
Copyright Wischmeyer Law Office - Google+
More information about Wischmeyer Law Office
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
First, bankruptcy is an option that allows the homeowner to keep the home. If a home owner wants to keep the home, then a Chapter 13 bankruptcy can allow the homeowner to file bankruptcy, catch up on their missed payments and possibly even reduce the amount that the homeowner owes on the home. This is called a “cram down” and can have significant benefits helping a homeowner keep the home at the value that exists in today’s world.
The home owner may also be able to give the home to the bank, avoiding foreclosure, and the extra costs that often get tacked on to the mortgage because of the bank’s attorney fees, collection costs and the ongoing interest the mortgage allows the bank to collect. This process is called a Deed-In-Lieu and although bank’s put up significant barriers to avoid a Deed-In-Lieu, it is possible. Sometimes the bank will ask for the homeowner to make small payments toward the difference in the home’s value and the balance of the mortgage, but an experienced attorney often can negotiate the amount of the deficiency and the payment amount and term, to give the homeowner the financial relief they are seeking.
A third option is a short sale. With a short sale the homeowner obtains permission from the bank to sell the home to a third party for less than the balance owed on the home. This is not a quick process, but an experienced short sale attorney can help expedite the process by having the short sale prepared and the discussions with the bank; so that when an offer is made on the home, the bank has the information needed to evaluate the proposed sale and get an answer back to the homeowner on allowing the sale.
Having financial difficulties with an underwater mortgage should not leave a homeowner with only the option of allowing a foreclosure on the bank’s terms. An experienced attorney can help facilitate some other deal with the bank, delay any foreclosure and give a homeowner the ability to feel in control of the process. Often times, if the homeowner wants the attorney and Realtor can help save the home.
ABOUT THE AUTHOR: Jason P. Wischmeyer
Throughout his 10 year career as an attorney, small businesses and large corporations hire Jason to pro-actively evaluate and advise them on legal matters ranging from contract preparation, human resources, debt collections and general business management consultation. Insurance companies seek his help with first and third party defense cases and insurance coverage matters. Men, women and parents have received settlements and won jury verdicts for car accident and medical malpractice injuries and death For people with debt issues, Jason obtains them a fresh start through negotiations with creditors or filing Chapter 7 or Chapter 13 bankruptcy. National and local attorneys refer their business and individual clients to Jason for representation in Indiana knowing their client's legal matter will be handled cost-effectively and the client will obtain results. Mostly, Jason assists individuals, small businesses and large corporations find legal solutions for their lives and businesses.
Copyright Wischmeyer Law Office - Google+
More information about Wischmeyer Law Office
View all articles published by Wischmeyer Law Office
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
