Removal of a 2nd Mortgage Through Chapter 13 Bankruptcy

Chapter 13 Bankruptcy offers an important, and often unknown, option to consumers who have residential real estate mortgages. Namely, removing a junior lien holder or "2nd" from your debt. Since the value of real estate has decreased, a common complaint I hear is, "I cannot believe I am paying more than my house is actually worth."

If you purchased a home in the past three to four years and financed with 80/20 mortgages, or if you refinanced your home and took out a second mortgage, chances are you can completely remove that second mortgage and other junior liens from your home.

Imagine...file a chapter 13 Bankruptcy to eliminate all your credit card debt, reduce your car payments, cure the back payments on your first mortgage and now, entirely remove your second mortgage.

In addition, if your house value bounces back, that equity is yours to keep.

It is important to realize that the removal of a 2nd mortgage is available in a Chapter 13 bankruptcy only. The ideal candidate for this process has a 2nd mortgage on a home that is no longer appraised at or above the amount of the 1st mortgage. It is necessary to obtain comps for the property and an appraisal to establish your the fair market value of the home.

If the fair market value works, a motion to get court approval will need to be filed. The mortgage company may oppose this motion. This will then require an evidentiary hearing and perhaps an adversary complaint. If the court decides that the fair market value of the home is below what is owed on the first mortgage, the second mortgage is "stripped" from the home and the debt associated with the second mortgage is made an unsecured debt (essentially being treated like credit card debt). Typically, in a Chapter 13 bankruptcy, a small percentage of the unsecured debt is paid, if at all.

Once the motion is approved, you will need to make all plan payments (over a 3 to 5 year period) and obtain your discharge. Once the debts are discharged, the second mortgage is completely gone.

Under existing Bankruptcy laws, debtors are not able to force a first mortgage to modify the terms of the mortgage on loans for their primary residence. Many lenders who realize the alarming state of the economy are willing to negotiate a modification of their mortgage, allowing a debtor to lower their monthly payments. This is a relatively recent change for many lenders who had previously refused to accommodate such requests. Such a modification may drastically help a homeowner who wants to keep their home but who is suffering from a reduction in income and home value. This benefit is even more evident when used in conjunction with the removal of a second mortgage for debtors who have both a first and second mortgage.

Further, recent legislation was introduced in Congress in the first week of 2009 that would now allow Bankruptcy judges in Chapter 13 cases to modify first mortgages by:

-reducing the amount of the secured claim (i.e. lowering the balance on the mortgage/deed of trust that is secured by the home);
-changing the interest rate of the loan or modifying the adjustable feature of certain loans; and/or
-changing the term of the loan.

This bill, if enacted, would finally provide some relief to homeowners. In the past, the mortgage lenders have vehemently opposed such a change. However, this time may be different. News reports indicate Citigroup has already suggested that it would support this legislation with some minor revisions, one of which is to require that a homeowner first attempt to modify the loan directly with the lender(s) before the loan can be modified by a Bankruptcy judge.

Bake Chicken Foods

Continuar leyendo

Ocultar articulo

How Does Filing Bankruptcy Affect Your Mortgage?

When someone experiences financial crisis like job loss or business failure, it becomes quite difficult for him to repay the existing loans/debts. Though filing bankruptcy may seem to be a viable option in order to get rid of the multiple debts, yet it may become difficult to qualify for a new mortgage. You should also know that your existing mortgage gets affected when you file bankruptcy.

What happens to your existing mortgage after bankruptcy filing?

When you want to declare bankruptcy, you need to file either chapter 7 or chapter 13. However, the consequences of filing chapter 7 are different from that of chapter 13. The effects on your existing mortgage after filing bankruptcy are discussed below.

Consequences of filing Chapter 13:

You can protect your home from a foreclosure by filing chapter 13 bankruptcy; however, it is advisable that you seek help from an experienced bankruptcy lawyer. By filing chapter 13, you can work on a structured debt repayment plan, which can also take care of your monthly expenses. Usually, you need to repay your loan within 3-5 years. Chapter 13 can also give you automatic stay protection, which can prevent your creditors from suing you. It is also helpful to stop collection efforts during the repayment tenure.

Consequences of filing Chapter 7:

Sometimes filing chapter 13 can be really expensive for the homeowners. In that case, filing chapter 7 bankruptcy is favorable for them. It can free you from your personal liabilities to pay back the existing debts. However, homeowners may still be unable to keep their house after the discharge of bankruptcy.

Reaffirming mortgage debt:

If you want to save your home even after filing chapter 7 bankruptcy, then you need to file a reaffirmation agreement. Once you file the paperwork, the mortgage company may agree to work with you and also approve your plan so that you can clear the delinquent account within a specific time period. It means that you are agreeing to pay off the debt amount, which you owe to your lenders.

Paying for deficiency after foreclosure:

If your bank forecloses your property but cannot recover the unpaid debt, then you might have to pay for the deficiency.

How do you qualify for a new mortgage after bankruptcy?

Go through the following points to know how you can qualify for a mortgage even after filing bankruptcy.

1. Try to rebuild your credit - If you have some debts that you've not included while filing bankruptcy, then try to repay them on time. It will help rebuild your credit so that you can apply for new loans in 2 years of time.

2. Plan a budget and follow it - Analyze your financial status and prepare a budget. Try to follow it in order to save yourself from any more debt problems in future.

3. Try for FHA or VA mortgage loans - It is relatively easier to qualify for an FHA or a VA mortgage loan than that of conventional mortgage loans.

4. Get ready for making a down payment - You may not qualify for a zero down payment mortgage. Therefore, you may need to make a down payment in order to qualify for the mortgage.

5. Check your credit reports regularly - It is really important to check your credit reports regularly. If there are errors, then fix them immediately.

It is quite important to learn from your past mistakes. Therefore, you should not make any more mistakes that can compel you to file another bankruptcy in future. When you are taking out any loan/debt, you should carefully analyze your financial situation in order to ensure that you'll be able to make the required monthly payments on time.

Bake Chicken Foods

Continuar leyendo

Ocultar articulo

Post Bankruptcy Mortgage Loan

Is there life after bankruptcy? That's a common concern for those who are looking at it as an option or have filed for it previously. A larger concern people have is whether it's possible to get a mortgage loan if you already filed bankruptcy. Well there is good news! You can get a mortgage loan even AFTER you've filed bankruptcy.

Bankruptcy hits hard and it's not easy to manage its effects. For instance, you now have a bad mark on your credit for a few years. And if you're looking for a mortgage loan, most banks you ask will want you to wait a period before they'll review you for a loan. Usually it takes about 2 years after bankruptcy kicks in. However, once you wait out that period of time, you should be able to get your financing so long as you kept up with your payments after you claimed bankruptcy. If most of your payments were on time, then you'll have a much better success rate in getting a mortgage loan.

So is it possible to get a mortgage loan before the typical 2 year period? Anything is possible but it's not as easy. First they want to make sure that you are still credible as a client so your payments after bankruptcy will have to be on time. If just a few aren't on time, then you have a high chance of getting denied. The second thing they will want is money in hand. This means you will have to have some type of down payment for them. Expect to have around 5% for a down payment to hand over or else you probably won't be considered for a mortgage loan. Also, don't forget that in any case, you will always have to provide a type of income verification. Having money in hand isn't enough, the lenders want to make sure that you will continue receiving enough money to pay them off.

It may seem odd that you claimed bankruptcy and they expect you to have money saved up for a down payment, but that's the nature of the game. If you don't have money saved already to hand over and you really need this mortgage loan, then you are going to have to explore all your resources. Do you trade stocks? Do you have a retirement plan you can tap into? Do you have a 401K? These are all ways to get your down payment. You can cash out your 401K and use that money to give to the lender. You can always get that money back once you have the house financed. You will most likely be able to get a 2nd mortgage loan for the full value of the house. This tactic also comes in handy if you have to borrow the money from someone you know such as siblings, parents, or friends. Use the 2nd mortgage to pay them back the amount loaned to you. Word to the wise: tell your lender if a relative gave you the money for the down payment. They actually have rules regarding where the money is coming from. If they ever find out otherwise they can consider you to be defrauding them. That's territory that you do not want to go into.

Another option for getting a down payment is to use down payment assistance programs. Some programs can give you grants. This is the best money to receive because you don't have to pay them back! They may also be able to get the down payment from the seller of the house which normally is illegal. The best way to find out about these services is to ask your bank or do some research online.

In the end, all hope is not lost because you filed bankruptcy. Getting a mortgage loan is a prime example that life can go on and your credit is not destroyed as many think. It just takes a little honest work and effort.

Bake Chicken Foods

Continuar leyendo

Ocultar articulo

Learn How To Get A Mortgage While In Bankruptcy

You are probably thinking how in the world can I get a mortgage while in Bankruptcy? Well guess what you can. In this article I will teach you what to do. Two of the most common bankruptcies among people are Chapter 13 and Chapter 7. Here are there attributes.

Chapter 13

Chapter 13 is where you set up payments with the court to a trustee. This typically takes place over 5 years. You will pay back a portion of what is owed to creditors. Chapter 13 stays on your credit report for 7 yrs.

Chapter 7

Chapter 7 is where you file bankruptcy through the courts, and dissolve all debt. This particular bankruptcy is looked at much more harshly with creditors and stays on your credit report for 10yrs.

Bankruptcy is usually the last resort when it comes to getting yourself out of a swamp of credit problems. I personally believe most people don't want to file bankruptcy but have no choice once they do. Usually bankruptcy is stemmed from lots of debt. There is hope though when it comes to buying a home. I will tell you real quick, you cannot buy a home while in a Chapter 7. Banks will not touch you with a ten foot pole, usually for 2 to 3 years. You can buy a home while in a Chapter 13, only if your trustee gives you permission.

Requirements to get a Mortgage while in Chapter 13

1. Must have permission from Trustee

2. Must have a lender willing to finance you FHA

3. Must have a minimum 12 month payment history with Bankruptcy.

4. Cannot have any late payments after bankruptcy is filed

5. Cannot have any collections after bankruptcy is filed.

6. Must have 3 alternate lines of credit.

A. Examples:

a. Letter from electric company stating you have been on time with payment for last 12 months

b. Letter from Phone Company stating you have been on time with payments for the last 12 months

c. Letter from any utility company stating you have been on time with your payments for the last 12 months.

If you are in a chapter 13, and you meet all these requirements you should be able to get financed FHA. The first thing you need to do is pull a recent copy of you free credit report, and make sure you have not had any collections or slow pays on your credit report during bankruptcy.

Bake Chicken Foods

Continuar leyendo

Ocultar articulo

Second Mortgages, Home Equity Loans And Bankruptcy

It is not uncommon to have a first mortgage and a second mortgage or a home equity loan on your home. Even though the amount of the second mortgage or home equity loan is less than your first mortgage, the interest rate that you are paying is usually much higher. You may be wondering if there is anything that can be done to reduce these encumbrances on your property. It may mean the difference between being able to keep your home or losing it because you cannot afford the payments, or worse, your house is being foreclosed on.

The answer is that there are certain situations in which that second mortgage or home equity loan can be modified, or as it is known in bankruptcy language, "stripped off." The first requirement is that a Chapter 13 bankruptcy be filed. (Chapter 7 bankruptcies do not allow for modification of a second mortgage or home equity loan). How this is done is best illustrated by the following examples:

1) You own a house that has a value of $300,000.00 at the time you file bankruptcy. The first mortgage is $325,000.00. The second mortgage or home equity loan is $75,000.00. That $75,000.00 can be "stripped off" and be treated the same as your other unsecured debt. If your Chapter 13 Plan calls for paying 10% to unsecured creditors, you will be paying $7,500.00 over the life of your Chapter 13 bankruptcy, which is between 3 and 5 years. If your payment plan is 20%, then you will pay $15,000.00 over that period of 3 to 5 years.

2) In this example, let's also assume that your home is worth $300,000.00 at the time you file bankruptcy. The first mortgage is $275,000.00. The second mortgage or home equity loan is $75,000.00. The $75,000.00 cannot be "stripped off." The rule is that if even one cent attaches to equity, you do not qualify for a "strip off." This means that if your first mortgage on your $300,000.00 home is $299,999.99 or less, the "strip off" provision of the bankruptcy law will not help you.

In conclusion, "lien stripping" may be an effective way to save your home because you are unable to make the second mortgage payments or are in foreclosure. You will be able to lower your monthly payments and eventually entirely eliminate your second mortgage or home equity loan.

Bake Chicken Foods

Continuar leyendo

Ocultar articulo

Buying a Home After Bankruptcy - Beware of Shady Subprime Mortgage Lenders

If you have a recent bankruptcy and are looking to buy a home, be careful of unethical or predatory lenders. Whether you are looking online or offline for a mortgage lender, it is becoming increasingly more common that subprime lenders are taking advantage of bad credit borrowers.

Many lenders will take advantage of borrowers with recent bankruptcies and bad credit because they know that the borrowers loan options are limited. Sometimes these lenders will charge excessively high fees, extensive pre-payment penalties on the home or ask for a fee upfront to "process" the loan.

Here are some tips on applying for a mortgage loan after a bankruptcy:

Beware of the Lender Asking For a Fee Upfront - Anytime you are applying for a mortgage loan, the only fee you should ever have to pay is the application fee which covers the cost of the lender pulling your credit application. Some lending scams involve asking for a processing fee of hundreds to thousands to process the loan.

Compare Loan Offers - If you can compare from 3-4 mortgage application quotes then you will know what to expect the current interest rate for subprime mortgage loans to be. If you accept the first mortgage loan offer you have, you may be paying a much higher interest rate than what is reasonable for your credit history.

Get Closing Costs in Writing - Brokers know that if a borrower has bad credit, they are most likely going to be more concerned about getting a reasonable interest rate and just getting approved than making sure they get normal closing costs. This is where many lenders will ding the borrower with credit problems. They will sometimes charge excessive closing cost fees. Get the list of closing costs in writing ahead of time and then do research online to make sure that the costs are reasonable. If the costs are not, go back to the lender and tell them that the closing costs are too high and you will not go through with the loan until they are lowered to be what is normal. The broker will usually comply, because they don't want the loan to fall through.

Bake Chicken Foods

Continuar leyendo

Ocultar articulo

Bankruptcy Mortgage - Purchase a home after bankruptcy

Even if you have good credit, can be difficult to obtain a mortgage in today's credit market. If you have bad credit or bankruptcy, you may think that it is impossible to get a mortgage. But it would be wrong. The truth is that it is very possible to get approved for a mortgage after you have filed bankruptcy. In fact, you are more likely to get a mortgage in bankruptcy, as you do when you only have bad credit.

To get a failureMortgage>, you need to do some things. The first thing to do, is to honor the terms of your bankruptcy. If you are asked to make payments, you make all payments in full and on time. After about two years, you will start to borrow again.

Once you start getting offers for loans begin to be cautious. You may be tempted to go and use your newly acquired credit the things you did not buy during your bankruptcy. It should not. WhenThey apply for a mortgage, the lender will want to know to be responsible with your finances. You want to be sure that you have learned of your bankruptcy, and that is in a position to pay your mortgage. If you have too many other commitments, they assume that you are overloading it again, and are not to be responsible.

You want to make sure you have a down payment. No deposit not only reduces the amountYou have to finance, but also shows lenders that you are serious about buying a house. The deposit is the best way that you saved for himself. But if you can afford not to save a deposit, you can care for the deposit to the Community Action Programmes in your region. They may also be able to borrow the down payment from a family member. However, for most of the time the lender filing a gift and not something youto repay.

credit report repair

Continuar leyendo

Ocultar articulo

Bankruptcy - The good vs. evil - the failure of a good decision for me?

If you are facing a possible bankruptcy, you face a terribly difficult decision. What can deal more effectively knowing the crushing burden of dealing with that debt, or the fact that they have not done. How else can it be out of this mess you are in financial ruin, without your good name or credit? Well, if the claim was so good, it would be really failed?

Whatever you personally to resolve this complex issue, some 'adviceis looking for a credit counseling service non-profit for the help. They are skilled professionals who make these decisions with you. You are not alone, but must try to help. You will not find.

It 's true if you let us know your financial burdens behind and get a fresh start, then bankruptcy can be the right decision for you. But the credit counselor can negotiate with creditors may be in your name and avoid bankruptcy alltogether at least for the meantime.

Depending on the age you can still have enough time to restart and restore the credit value that is currently lacking. If you go with 'the failure of collection, foreclosure and collection actions pending against you once you stop the petition. If the bankruptcy is approved, resources have been included in the bankruptcy are now in foreclosure, and can not make monthly payments. Bankruptcy is a goodOption for you if you are not a lot of activities that must be repaid. Most states allow you to save your principal residence, your car and other essential goods to keep their lives to earn.

If you're like most people, you can do anything to avoid registration because it is hard to cope with failure, because it can make you feel like a failure. Your name will be in criminal records and may be published in the newspaper.

You can only file bankruptcy once every six years, sois not considered a potential "loophole". The bankruptcy your credit history and 'ruined for up to the next 10 years, making it difficult to obtain credit. This is your potential creditors, using the excuse of failure for the protection included in your debt.

The debt to you will be treated for most of the trustee. However, there are some debts, no matter what you will not be wiped out. The non-exempt assets are soldas you pay your debts as possible. to release some of your furniture, but could be forced to sell the sentimental terms. These are credit cards out and it becomes increasingly difficult, again for at least the next three years to be approved. Depending on individual circumstances, bankruptcy can be a good way to get your debt, but there are consequences for the future.

Obviously no one wants to declare bankruptcy guide. I do not think aindividual cases presented and a credit for the idea that he would do anything to get the credit ruined and make it more difficult to credit in the future shortage. If it happens that you file bankruptcy, take the advice of the consultant and seek at all costs to future situations that once you give the bankruptcy court should have avoided.

Bad Credit Card

Continuar leyendo

Ocultar articulo

Your bank in imminent danger of bankruptcy?

While the Dow Jones falls below 10,000, it is not only your investment, which could be in danger.

Your bank may be, too.

Let's face it: The world economy is still raw. The debacle of European debt continues to spread from one country to another, without any good where it will end one. Here at home, the recovery is softer.

The best way is to evaluate the economy, the hodgepodge of indicators that are released every day and focus on measuring what matters most to ignore.It's not like chain stores reported sales and the unemployment rate, but it is still the best indicator of how the economy is doing.

This indicator is called "rate of net charge-offs. It 's the level of bank loans that borrowers can not repay, and I think that the most significant way to measure the real economic health of the nation. Say, unemployment has fallen from 10% to 5%. Are not people still can not afford to repay their loans, then the country really become stronger, do you have?

L 'Depreciation is 1.94%, and has grown incredibly, five times since early 2007. In a typical year, banks should expect about 32 cents for every $ 100 that damage to lose. At the moment, but banks are losing $ 1.94 to $ 100 loans.

This problem is exacerbated by the Bank's financial situation deteriorated. In early 2007, the banks $ 1.80 in cash reserves were for every dollar of loans that were late. So even if all those loans bankruptcy - and not all overdue loansbe - the banks were covered. Today, banks have only about 80 cents for every dollar of loans.

Do not be ridiculous to think that the worst of the financial crisis is over. Some banks are just beginning. Eat all the bad loans hurt all banks and many others are doomed to failure. The Federal Deposit Insurance Corp. (FDIC) says 77% of the banks are profitable. But that leaves 23%, which are bleeding cash.

The FDIC now has 775 banks on its "problem. Bank-listed so far this year 83 banks have failed, about half of them so in the second quarter, this is a truly frightening number than in the past. More than a third of the banks that have failed since 2000, so he done in the first five months of 2010.

The FDIC does not release its list of problem loans, but only says how many banks are on it. But with a special relationship that a bank can borrow money (the forerunner of the loans that are ultimately paid), the measures of investordetermine with a high degree of accuracy if their bank is safe.

It's called "Texas ratio." E 'was developed by a financial officer at RBC Capital Markets named Gerard Cassidy, using correctly predict bank failures in Texas in 1980 the recession in New England again in the recession of the early 1990s.

The Texas ratio is calculated by dividing the distressed assets of the bank by its shares of common equipment and provisions for loan losses. Tangible common equityEquity less goodwill and intangible assets. As the ratio approaches 1.0, the Bank increased risk of failure.

Any bank that has not in the second quarter, was a Texas ratio of greater than 0.90. In fact, the average was about 5.0.

Bank failures are set to announce on Friday afternoon, after the end of the activities of the week. 5 The Bloomberg News reported in June that three banks had failed: Tierone Bank in Nebraska, Arcola Homestead Savings Bank in Illinois and First National Rosedale,Mississippi. On June 11 it was reported that another bank, Washington First International Bank, was seized. It was June 18 Nevada Security Bank.

Frankly, none of these failures should be a surprise. After all, Rosedale Texas has the highest ratio of any bank in the country at 15.78. Tierone was 4.05, and Arcola was 0.91.

Investors can not afford not to know if your bank in one of the ten banks when it is in great danger, which is in me.It 'important to ensure that all investors, the list of banks with regard to their money is safe. And if your bank is a high or even higher than the average of Texas has money, then for heaven's sake, tomorrow, and close the accounts. It 's always better to get out of Dodge first farce.

This highly accurate barometer of the health of the bank, I not only reassures me that my bank - the highest rating Amarillo National - is safe and sound, I also made a list of ten banksmore likely to fail. If you bank at one of these organizations or friends or relatives who do, please pass this information along to them:

The ten banks in danger of failure, of 9 June 2010:

1. U.S. Bank, Port Chester, New York

2. First Commerce Community Bank, Douglasville, GA

3. SouthWestUSA Bank, Las Vegas, NV

4. High Desert State Bank, Albuquerque, NM

5. Bank of Ellijay, Ellijay, CA

6. Eastern Savings Bank, Hunt Valley, MD

7. ISNBank, Cherry Hill, NJ

8. Habersham Bank, Clarksville, GA

9. Ravenswood Bank, Chicago, IL

10. First National, Savannah, GA

I do not want to see go to any bank. But the fact that there are many, and many more will be how the financial system through its mountain of bad loans. The best way to predict which bank is in hot water is to use the ratio of Texas.

The good news is that the 20 banks listed in the S & P 500 have low ratios of Texas.

Institution -Ticker - Texas Value
Northern Trust - NTRS - 0.04
Peoples United - PBCT - 0.11
Hudson City Bancorp - HCBK - 0.15
Comerica - CMA - 0.20
Fifth Third - FITB - 0.23
Citigroup - C - 0.25
KeyBank - KEY - 0.27
M & T - MT - 0.29
First Horizon - FHN - 0.32
Marshall & Isley - MI - 0.37
Regions Financial - RF - 0.37
Bancorp Zion - Zion - 0.42
JP Morgan Chase - JPM - 0.45
PNC Financial - PNC - 0.45
BB & T - BBT - 0.45
Huntington - HBAN -00:48
Suntrust - STI - 0.54
Bank of America - BAC - 0.55
U.S. Bank - USB - 0.60
Wells Fargo - WFC - 0.64

And again, if you have friends or relatives, the Bank in one of the institutions where this information, please have it immediately.

equitymortgage currencyexchangerates

Continuar leyendo

Ocultar articulo