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March 25, 2014

Will I be able to buy a house after filing bankruptcy?

Many of my clients want to know if they will ever be able to buy a house after they file bankruptcy. Or they think they will have to wait 10 years. Yes, you can buy a house and no, it won't take you 10 years.
Yes, it is true that lenders may not want to loan you money right away. But within a year or so the credit companies are filling your mailbox with credit card offers, along with solicitations from finance and car loan companies.
Mortgage companies look at 3 things when you decide to buy a house. Your FICO score, your current income, and your down payment.
With no more late payments and past due accounts, your FICO score will come back up pretty quickly over the next year or so after bankruptcy.
As to your current income, they will want to know a few things. Do you have enough money to make the mortgage payments along with your other living expenses? Did you pay your rent on time? This is important to mortgage lenders. If you paid your rent on time, you will more than likely pay your house note on time.
How much money are you willing to put down on the house? The more money you put down, the less anyone cares about your former credit score or the fact that you filed bankruptcy.
Don't forget about other methods of buying a home without using a traditional mortgage lender, such as owner financing, wrap around mortgages, and lease purchase options.
So, if you want to get a house, you can. You may need to wait a couple of years, but it is not something you want to jump right into anyway. Owning a house is not always the best thing for you at every stage of your life. Owning a house ties you down and carries a lot of extra expenses. But rest assured, if you want a house, filing bankruptcy won't prevent you from getting one.

Tagged: Bankruptcy, Legal question, Mortgage and Lending Laws

July 15, 2013

Is Green Tree Harassing You?

Green Tree Servicing is one of the biggest servicers of mortgage loans in the United States. They specialize in collection of subprime home mortgage debts. When they call you they are very aggressive in their collection methods. Green Tree is based in St. Paul, Minnesota, and operates 29 offices for its collection operations. Green Tree Servicing, LLC, is owned by Walter Investment Management Corp. In recent months Green Tree has acquired hundreds of thousands of loans. Bank of America recently sold mortgage servicing rights on 650,000 mortgage loans worth around $93 Billion to Walter Investment Management Corp. Bank of America has recently been sued for preventing loan modifications and paying bonuses to employees to foreclose on homeowners.

Tagged: Bankruptcy, Foreclosure, Mortgage and Lending Laws

June 03, 2013

What happens if your home insurance lapses?

Your mortgage documents require you to keep your house and property insured. If you let your homeowners insurance coverage lapse, the mortgage company will get coverage for you that protects the payment of the debt you owe them. This type of insurance is called force placed or hazard insurance, or sometimes referred to as lender placed insurance.
This insurance is BAD for the homeowner! It is very costly and does NOT protect you, the homeowner. Many people believe this coverage protects their contents. Wrong! The insurance your mortgage company gets for you is much more expensive than insurance you would obtain on your own. The mortgage company charges you an inflated price for insurance that does not protect you or your property at all.
Your mortgage company is not under any obligation to find the cheapest rates for you. They will not look around and try to find the best terms for you or the strongest insurance company. They are not required to protect the contents of your home or protect you from people who are injured on your property that may sue you. To make matters worse, the policy your mortgage company will obtain only covers the value of the property up to the loan balance. In other words, if does not cover any equity in the house. And the lender is the only one protected. If the house burns down, only the mortgage company is protected. You get nothing.
In most cases, you, the homeowner do not have the right to cancel the hazard insurance policy - only the lender can cancel it. Your mortgage lender has the right to purchase forced placed insurance to cover your house and they can do this if the property has no insurance or it does not have enough insurance.
Usually the premiums are higher for this type of insurance because the insurance industry believes these types of properties are at a higher risk of loss if the homeowner has chosen not to insure his own property. The increased cost of this insurance coverage is your responsibility. Any money your mortgage company spends for force placed insurance will be added to your loan.
Bottom line - protect your home and your property - get your own insurance coverage ASAP!

Tagged: Insurance, Mortgage and Lending Laws

February 08, 2013

Can I give up rental property I own through bankruptcy?

Yes. If you are thinking about not keeping your rental property any more, you are by no means alone in that thought. There are over 11 million people who are upside down on the value of their property compared to amount owed - whether it is the home they live in or the house(s) they have as rental property, the affect is the same.
To make things worse, when you have tenants that cannot pay due to various economical challenges they are as well facing, you as the property owner must still find the resources to pay the monthly note. It is hard enough being a landlord and trying to eek out a living from your investment property during good economical times. So trying to do so under current economic conditions is unbearable for most. Empty rental property and/or tenants who are struggling to pay put in jeopardy your own financial security and possibly your own home. You are allowed to surrender the property back to your mortgage company through filing bankruptcy and will no longer have to pay for the property. If you own investment properties and issues stemming from this property is threatening to pull you under, you should consult with a bankruptcy attorney as quickly as possible to know and understand your options and lay out a strategy that will work for your specific situation. Don't wait until bankruptcy is your only option and the situation is so bad that you are facing the loss of your own home.

Tagged: Bankruptcy, Foreclosure, Mortgage and Lending Laws, Property Law

February 07, 2013

Do I owe taxes for debt I wiped out in bankruptcy?

Possibly. But there are reasons you may not have to pay tax created from filing bankruptcy. Let me explain.
Self-employed workers receive a 1099 for their wages instead of a W-2 form that you get if you are employed by a company, etc. But there is a type of 1099 form that, regardless if you are self-employed or employed by someone else, you may receive from one of the creditors within your bankruptcy. This is form is called a 1099C.
A 1099C form is utilized by a creditor when a portion or all of a debt is wiped out or forgiven. The creditor is required to report this debt to the IRS if the amount is greater than $600.00. The IRS then deems the cancelled or forgiven debt as income which then must be reported on your tax return as additional income.
Your creditor should mail a copy of the 1099C form to you when they file the 1099C form with the IRS. If you did not receive a copy, you of course would not know to report this income. The IRS will send you a notice explaining that you did not include all income on your tax return per a creditor(s) filing a 1099C form. Now you owe penalties and interest on the amount of taxes owed stemming from the 1099C form.
But wait, there are several reasons why you might not have to pay taxes on the forgiven or canceled debt.
IRS Publication 4681 lists some of the exceptions that would exclude you of the penalties, interest, and taxes stemming from a 1099C.
• The debt stemmed from the foreclosure of a residence
• The debt was discharged through a bankruptcy • The debt was a result of the modification of a home loan under the Homeowners Affordable Modification Program (HAMP)
• The debt was a qualified farm debt • The debt would have been a deductible payment
• The debt was forgiven as a gift to you or as a bequest in a will If one or more of the above exceptions applies to your debt, you should list it on IRS Form 982 and file this form with your tax return in order to prevent owing taxes from this activity.
Bottom line, be sure that your tax preparer knows that you filed bankruptcy. Have your tax preparer attach IRS Form 982 to your tax return. Your tax preparer should check the box in Part 1 that states "Discharge of indebtedness in a title 11 case". Title 11 properly identifies bankruptcy in reference to the debt (it is not referring to the type of bankruptcy you filed such as a Chapter 7, Chapter 13, etc). A copy of your bankruptcy discharge should be attached to the IRS Form 982.
If you receive the 1099C after you have already filed your tax return, then you will need to file an amended return. Do not ignore or disregard these forms. It is in your best interest to deal with this situation now rather than letting it sit and penalties, interest, etc build.

Tagged: Bankruptcy, Foreclosure, Mortgage and Lending Laws

December 21, 2012

Dual Tracking- Foreclosure and Modification at the Same Time?

Are you a homeowner in the middle of the modification process with your mortgage company and you just got a notice of foreclosure? Have you been told over and over the modification was still being reviewed? Have you been told the modification was approved? But all of a sudden you find a notice in the newspaper listing your home with a foreclosure sale date set at the courthouse. This is called "dual tracking". Mortgage companies review loans for modification and try to foreclosure at the same time. They don't stop the foreclosure process when a mortgage is considered for a modification. If you are in the modification process with your mortgage company, never assume that it will be approved or that they won't foreclose. The procedure for foreclosing in Mississippi is fast and you can't trust anything the mortgage company tells you over the phone. If you find out your home is in foreclosure, contact our office immediately. We can file a Chapter 13 bankruptcy to stop the foreclosure sale and you can still be eligible for a modification. You do not want to be evicted and fighting to get your home back after the foreclosure. Better to be on the safe side and stop the foreclosure before it happens.

Tagged: Bankruptcy, Foreclosure, Mortgage and Lending Laws

July 04, 2012

10 Reasons Why Chapter 13 Is A Financial "Super Tool"

Chapter 13 Bankruptcy is not just a method to stop foreclosure or wipe out credit card and other debt. Sure, filing a Chapter 13 can do that but it is a powerful financial tool that can do so much more! It can be used to restructure debts for a period of up to 5 years and provide a way for a debtor to control their debt load without sacrificing a decent standard of living. A debtor is under the protection of the court during the Chapter 13 period. The debtor's personal & real property, pay, and bank accounts are all protected (with very limited exceptions).

Tagged: Bankruptcy, Foreclosure, Mortgage and Lending Laws, Property Law

January 19, 2012

The American Dream has become a Nightmare.

Everyone, from the wealthy down to the hourly worker, wants to own a home. It's the American Dream right?
Until around 15 years ago, if you didn't have money for a down payment and pretty good credit, it was almost impossible to get a mortgage. Then things started changing. Banks started approving mortgages for more and more people. Suddenly everyone could have a home of their own.
But the mortgage companies weren't being kind, they were secretly getting ruthless. They started peddline mortgages with adjustable rates, interest-only payments, and multiple-payment options. Why did they do it? Simple - to make more money.
Maybe you got one of those mortgages. There's nothing wrong with most of them. In fact, they helped millions of people finally step out from under the shadow of a landlord and get a place of their own.
The problem is that no one explained to you exactly what you were getting and what the implications of these loans really were. The loan officers and morgage brokers painted a very rosy picture telling borrowers that they could just refinance in a couple of years. Nobody told you the full story...About how refinancing depended on your home's value going up. About how your adjustable rate loan could go up every single year if you couldn't refinance. About how your principal balance would never go down and your payments could double or even triple.
Didn't the banks know people would fall behind on their mortgages? Didn't they see this coming a mile away?
Absolutely! So why did they push these loans on people? Simple. It was all about money. You see, mortgage banks knew that they could package and sell these mortgages to investors who were hungry for high-risk, big-money deals. And were not talking just about investors in the United States. Much of this investment came from hedge funds filled with money from China, Japan, Saudi Arabia, and a host of other far-flung parts of the world. What's incredible is that one mortgage might be divided up 30 or 40 times; little pieces held by 30 or 40 investors. This is greed in its most basic form.
If you've been watching the news at all the last couple of years, this shouldn't all be new information. So why am I going on about this? To let you know that if you are one of the millions of Americans facing foreclosure (more than likely on property that is no longer worth what it was) or are falling behind on payments not knowing how much longer it will be before the lender forecloses - that there are real ways to fight back and hold on tightly to that house you scrimped and saved for. To let you know that if you own a home in Mississippi and are ready to take control and fight for your home - pick up the phone and call me to discuss a plan of attack.

Tagged: Bankruptcy, Foreclosure, Mortgage and Lending Laws

November 30, 2011

Is There a Foreclosure in Your Future?

Mississippi is number one in delinquent mortgages. During the month of October, there were more homeowners behind on their house payments in Mississippi than any other state.
According to the Mortgage Bankers Association there are 4.2 million homeowners across the country that are more than 90 days behind on their house payments or already in foreclosure. This indicates that we are not on the road to recovery like the media would have you believe.
Foreclosures are increasing and mortgage companies are still not willing to help homeowners with modifications. If you want to save the house you cannot sit around and wait for the foreclosure sale. Get your documents together now, meet with a lawyer that does foreclosure defense and bankruptcy and learn what your options are. Get the information now before you need it. Be prepared. Plan ahead. You don't buy car insurance after the wreck. Over and over people come in to meet with me after the foreclosure sale is set trying to find out what to do. In most cases we can still help them and save the house, but they would have been a lot better off meeting with me as soon as they started getting behind.

Tagged: Bankruptcy, Foreclosure, Mortgage and Lending Laws

November 09, 2011

Was your house forelosed in 2009 or 2010?

If your home was foreclosed between January 1, 2009 and December 31, 2010, you can request a review of the foreclosure process to see if it was handled properly. Fourteen mortgage companies are required to participate in this process. If there were errors, misrepresentations or other irregularities with the process, you may be entitled to financial compensation or other remedies. This process only applies to the home that was your primary residence. Letters will be mailed out from the mortgage companies, but they will probably be sent to the house that you no longer live in. If you would like to have your foreclosure reviewed, you can call 1-888-952-9105 for the form you will need to fill out or visit the web site at www.independentforeclosurereview.com.

Tagged: Foreclosure, Mortgage and Lending Laws, Property Law