Stop Foreclosure - The Loss Mitigation Alternative

Posted by Tomasheus Privetsky on August 17, 2009

If you find yourself facing foreclosure, there are probably several contributing factors, which have led to your situation. You might have lost your job, suffered an illness (and its accompanying medical bills) or been through a divorce. However you get here, one thing is certain; the bills are piling up and it is getting harder and harder to make ends meet. Even worse is the situation of having an adjustable rate mortgage whose interest rate has skyrocketed, making your payments much larger.

Unfortunately, while you’re worrying about stopping foreclosure of your home, you’re bombarded with letters, postcards, phone calls and strangers driving by and knocking on your door.

These investors are in the business of buying homes from people who are in danger of losing their homes to foreclosure and then selling these properties for a profit. They know that many people who are facing foreclosure have no alternative other than to sell their home for whatever price they can get.

Should you sell to an investor to avoid being foreclosed on? Maybe, but certainly not as your first option. And only after you exhausted other foreclosure prevention means such as rearranging your loan. Read the rest of this entry »

Cramming Down Secured Property

Posted by Mary Bush on August 5, 2009

A very powerful tool debtors have at their disposal should they find themselves in a bankruptcy situation is the ability to pay only the value of an asset. This is particularly enticing if you have a lien against secured property such as an automobile, mortgage on income property (but not on a residence) or piece of furniture that far exceeds the value of the property. The common term for this disparagement in value vs. loan is being, “upside down”. In most cases, the value of secured property such as an automobile, boat, or furniture you are financing decreases more rapidly than the loan is being repaid.

For example, most debtors own much more on their car or truck then the value of the car or truck, should they try to sell it. Additionally, you may be able to lower the interest rate on your payments (though not on a mortgage). Many debtors have secured loans where they agreed to pay 18%-35% interest, and sometimes even more. In a Chapter 13 bankruptcy you only have to pay most secured debts at the prime rate plus 1-3%, depending on the circumstances of your case. A debtor in a chapter 13 bankruptcy has the ability to motion the bankruptcy court to lower the amount that you owe on nearly all secured debts to pay only the fair market value of that property and to discharge any amount in excess of that value. Read the rest of this entry »