Foreclosures and Mortgage Delinquencies continue to rise despite government officials pressuring lenders to forestall foreclosure proceedings. After several months of pressure from Washington, mortgage lenders have begun revving up foreclosure proceedings.
What started, over a year ago, as a sub-prime only mortgage meltdown, has evolved into a full blown, across the board pandemic of mortgage delinquencies and foreclosures, including prime, Alt-A and subprime mortgages.
Several factors have combined to create this “perfect storm”: declining real estate valuations, rising unemployment, reduced credit availability and the conscious decision by many homeowners to deleverage (that being their only available option).
Homeowners need to be aware of the potential liability they may have for any deficiencies after the foreclosure sale. Many times, the house is sold for less than what is owed to the mortgages company, thus leaving a deficiency. Many times, the mortgage company, or their debt collector, will attempt to collect the deficiency amount from the former homeowner. These deficiency amounts can easily be in the tens of thousands of dollars, with many deficiencies exceeding $100,000.00. Large deficiencies such as these can leave consumers with no option except to file Chapter 7 Bankruptcy.
To avoid foreclosure, and in an attempt to keep their home, some homeowners may file Chapter 13 Debtor’s Court. Chapter 13 Debtor’s Court, in most cases, will stop the foreclosure sale, giving the homeowner an opportunity to catch up on past due mortgage payments.
If you are facing foreclosure or need additional information on Chapter 7 Bankruptcy or Chapter 13 Debtor’s Court, email me to schedule a free consultation to discuss your situation and what options are available to you.
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