Articles Posted in Foreclosure

HELOC’s or Home Equity Lines of Credit were pretty popular during the boom years and I’d put a good bet are a thing of the past for near distant future. Riverside County has lost 8 years of value in homes. I’ve seen many homes that are worth 50% of what is owed on a 1st mortgage. Homes that are underwater to the point that you owe more to the first then the home is worth are eligible for lien strips in Chapter 13 bankruptcy. This has been enticing enough for some clients that I have that even though their unsecured credit is minimal and typically would not fit a profile that had bankruptcy in their future, have led them to seek bankruptcy relief as a form of restructuring their mortgage. The amount of loan modifications that are being denied and peoples desire to get out of bad housing deals make bring them to the steps of the bankruptcy court. If you are in this position call a riverside bankruptcy attorney to discuss your options.

Chapter 13 bankruptcies are twice the usual amount on a monthly basis in Riverside County. I filed 3 Chapter 13’s last month and was amazed at how slow the trustee’s were to responding to issues in my cases. When I inquired I was told that filings are around 1000 for the month of December as opposed to the typical 500 that their office reviews. I don’t know if higher income people are needing to file or more people are being enticed with the potential for discharging 2nd mortgages and HELOC loans. I know 2 of the cases that I filed the clients qualified for Chapter 7 but chose to do a 13 because of a 50k dollar HELOC loan that we could discharge through the bankruptcy with the making of minimal payments over 3 years. The chapter 13 trustees while busy are still extremely persistent in examining the cases that I have sent over. They even went to the point of calculating my clients commute mileage when I put in an expense of 650 dollars for transportation costs. They thought that 550 was more reasonable based on their commutes. I hadn’t even calculated commutes and took my clients at face value and don’t know costs for oil changes etc which all get wrapped up in that expense. Even with the magnifying looking eye of the Chapter 13 office for many people it is the best way to go if your house is really upside down and you want to keep it. Either paying back arrearages or getting rid of 2nd homes makes Chapter 13 a better advantage to a 7 for some clients

Foreclosures will slow down throughout Country with recent developments but not so fast for California homeowners.

While news of foreclosures slowing down based on banks and lawyers questionable methods is great news it won’t be helping Califonia homeowners as much as other states. California has non-judicial foreclosure which means that within a deed of trust there is typically a power of sale cause. After a notice of default, the owner of the property(bank) will typically sell the property at a trustee notice of sale which gives the borrower 21 days. At a trustee sale, the lender will typically bid the amount that is due plus costs if there is not a bidder. The borrower has no right of redemption and deficiency judgments maybe purused in non-judicial foreclosure. That essentially means that the lender can sue you for their loss on the property and you could get a 1099C for their loss which can sometimes have the effect of making you accountable for their loss as income for tax purposes in the following year.

The issue the banks are facing on judicial foreclosures are that people are signing afffadavits about documents that they are not familiar with and have not reviewed. The affadavits say certain facts about the case including what is owed which signer says he has personal knowledge of. They are doing this to the tune of 10,000 affadavits a month which they could clearly not have personally reviewed in order to get a summary judgment and avoid going to trial which is more expensive. They tried to streamline the machine of foreclosures and in the midst they perverted the justice system. The banks in their carelessness have shown. Foreclosure attorneys have been questioning the standing of MERS(mortgage Electronic recording system) for years and have had some success so this ruling by judges who have timely questioned banks foreclosure processes which will help homeowners. As a bankruptcy attorney it will likely not allow me to delay filing petitions so I can keep home owners in their homes longer because the trustee sales will go an as usual since lenders almost always foreclose outside of the judicial system. Many people who live in their homes for free while the bank drudges through the foreclosure process are able to put their financial houses back in order. For states with judicial foreclosure this will be a relief for homeowners who try to rebuild their savings and move on with their lives after falling off a cliff with the loss in equity that their homes went through.