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Market Stats, and Market Analysis in Ada County

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The following is some good information that I have collected over the past. If you have
any questions, please don't hesitate to email me at
jeremy@adacountymarketreport.com

1. Foreclosure process
2. Pre-Foreclosure
3. Deed in lieu of foreclosure
4. Loan Modification
5. Foreclosure short sale
6. Mortgage Forbearance
7. Stop Foreclosure Process
8. Avoid Foreclosure
9. Making Homes Affordable Plan
10. Chapter 13 bankruptcy explained
11. Chapter 7 bankruptcy basics

The foreclosure process

Even if you miss one mortgage payment, you are in danger of having the foreclosure
process begin. Now, this does not necessarily mean you are inevitably going to be
foreclosed upon, but the mortgage company is going to tell you that they have not
received your payment and that you should send it immediately.
Typically, you will get these letters for two to three months if you do not make a
payment, and nothing else will happen. If you make good on your mortgage payments,
nothing else should occur and everything should be okay as far as your mortgage goes.
However, it might go on your credit report that you have been past due on your
mortgage payments.
Let's now see how the foreclosure process unfolds if you do not meet your
obligations:

1. Notice to accelerate

Once you are sixty days past due, you will get what is called a notice to accelerate. At
this point, you will need to bring the loan current and nothing else will do, usually, to
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stop the foreclosure process. You will need to pay the past amount plus any late fees
they assess you. You may also receive a threatening letter saying that if you do not pay
by a certain date, they may accelerate the due date of the loan and start
the foreclosure process. The letter may also tell you that if you do not pay the amount
past due and they accelerate the due date of the loan, you will also be responsible for
any attorney fees added to the delinquent amount.

2. The demand letter

If you do not respond by paying the full amount due on the date the mortgage company
has established in their notice to accelerate, they will hire an attorney and this attorney
will forward you what's called a demand letter.This letter formally notifies you that if you
don't bring your loan current immediately, the foreclosure process is going to go ahead
within the court system.

3. Notice of default (Click here to see Local Ada County NOD's)

If you do not respond to the previous demand letter by paying the full amount due plus
any attorney fees, the lender will then file a formal foreclosure notice with the court. This
is a notice of default, and will list the entire amount you need to pay. You have about
twenty to thirty days to respond to this judgment before the foreclosure process
proceeds further.

4. The notice of sale (Click here to see Local Ada County NOS's)

If you have not previously responded to the demand letter or to the notice of
foreclosure, you will be given a notice of sale after twenty to thirty days have gone by,
the period of time you were given to respond to the notice of foreclosure. This particular
notice simply sets the sheriff's auction date, and your house will be sold at auction at
that point.

Foreclosure information: stop home foreclosure

Be aware that this is the foreclosure process the mortgage lender takes if you do not
respond at any other point in the process.With the exception of the last step, the
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notice of sale, you have the ability to stop home foreclosure, in some cases, as
long as you stay in communication with the bank.
It does not necessarily mean you are not going to lose your home, but be aware that the
bank does not want to foreclose on you any more than you want the foreclosure
process to happen. Therefore, to help stop home foreclosure, establish communication
with the bank at the very first step of the process, even before you have missed your
first payment if you know it is going to happen.Therefore, to help stop home
foreclosure, establish communication with the bank at the very first step of the process,
even before you have missed your first payment if you know it is going to happen. They
may be willing to work with you to accept partial payments right up front until you've
caught up, AS LONG AS you keep in constant communication with them

Once you get to the point in the foreclosure process where they cannot accept partial
payments, the notice to accelerate,you will have no other recourse but to make full
payment or lose your house. Therefore, it is in your best interests to keep in constant
contact with your mortgage lender once you know you're going to have trouble meeting
your mortgage payments.
A pre foreclosure could be seen as an opportunity to avoid foreclosure. The foreclosure
procedures go through different stages. Pre foreclosures also allow the stressed
homeowner to make the late loan repayments, bring the account current and thus keep
the real estate.
A pre foreclosure is a stage previous to a foreclosure that can last from three to
six months. During this time, homeowners can still avoid foreclosure by simply paying
the defaulted mortgage payments. If you do that, your home will not go into full
foreclosure.

Property in pre-foreclosure

When a property is in pre foreclosure the bank or other lending company has to send
word to the homeowner that his/her house is in pre forclosure. At this stage of a pre
foreclosure home, most of the times the lenders are willing to collaborate with the
homeowner to design a plan that is acceptable for the lending society and makes
repayments affordable for the homeowner.
Keep in mind that generally the lending institution is not particularly interested in
a foreclosure process that costs them money. Besides, often foreclosure procedures fail
to produce the entire sum of money that is owed to them. They would rather work with
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homeowners in financial difficulties to find a solution for the missing mortgage
repayments.
In times of general economic troubles, it is not easy for the lenders to sell foreclosed
homes for the right price. Thus, they might end up losing money on the foreclosure and
the poor sale of the foreclosed home.
You can count on it most of the times. During the pre foreclosure, the banking or lending
institutions will try everything in their power to come up with a new payment schedule
to prevent foreclosure, perhaps a mortgage refinance planor extending the payment
period over more years to make the bills more affordable for the homeowner. You
should not delay collaborating with your lender. The sooner you get down to it the
better.

How foreclosure procedures start

States have regulations that establish the months that a property is in pre foreclosure.
The best thing you can do is to ask for advice at your local real estate agency,
specialized lawyer or lending society. You want to find out the amount of time you have
available to settle things with the lenders before they go on with the actual foreclosure
process.

During pre foreclosure the lending company does not have the legal right to go
on with foreclosure procedures. Hence, it is pivotal that you are aware of the exact
time at your disposal.During the pre foreclosure months, the lending society cannot take
legal actions to expel homeowners that have failed to meet their obligations from the pre
foreclosure property. If the pre foreclosure period ends without a new agreement
between the homeowner and the lender that corrects the late payments, the bank or
lending society have now the right to start foreclosure procedures and repossess the
foreclosed home. If the lending society and the homeowner develop a more affordable
repayment plan together, there is a foreclosure stop and from then on the new payment
schedule, mortgage refinance or mortgage expansion prevails. In fact, a pre
foreclosure process can occur more than once. However, the second time the lending
companies will be more reluctant to cooperate with homeowners that are repeatedly late
on payments to find a solution that corrects the non-payment situation. So be sure to
grab your opportunity stop foreclosure in the first pre foreclosure period. In a second pre
foreclosure collaboration with your lender will become more difficult.
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Deed in lieu of foreclosure

A deed in lieu of foreclosure is one of the several methods you can implement to stop
foreclosure. In times of economic crisis many people face the fact that they cannot pay
for the homes they bought years ago. Overextension of credit, loss of jobs, and many
other factors have left many families fearing foreclosure and unaware of the foreclosure
alternatives they could be taking advantage of. One such option is called adeed in lieu
of foreclosure. You have probably heard this term before, but there is a very good
chance that no one has explained it to you. Here is some basic information on deeds in
lieu of foreclosure and what they could do to help you in avoiding foreclosure.

What is a deed in lieu of foreclosure?

A deed in lieu of foreclosure is an option where homeowners voluntarily give up their

collateral in exchange for being released from all their mortgage obligations. If you can
make your mortgage payments, however, there is a good chance that you will not be
accepted for this option. Basically, if you know you are going to lose your home and
foreclosure is certain, you can choose to turn over the deed without going through the
whole foreclosure process. Since that process is painful and unpleasant for the
homeowner and expensive and difficult for the bank or lending society, it is an easier
method than dealing with the foreclosure process.

Benefits of a deed in lieu of foreclosure

Under the right circumstances, it can be a big help to the borrower and the lender alike:
• If the lender accepts your deed in lieu of foreclosure, you benefit from not being
responsible for any short fall.
• In a housing market where prices are frequently lower than the ones you
originally paid for the house, this is a way of not ending up having to take a short
sale.
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• Generally, you have ninety days to complete the process of transferring the
deed once the process has been initiated.

Not everyone qualifies for a deed in lieu of foreclosure

However, you should be aware that there are some reasons your lender might not
accept your offer to transfer the deed to avoid the foreclocure process. For instance:
• If it looks like you can pay the difference between the mortgage and the market
value of the house, you may be required to do so.
• If it looks like you are letting property foreclose because it is more convenient to
do so, rather than out of real financial problems, you may also be refused.
• If you have a home equity loan, mortgage, or other lien on your property, you will
not be allowed to do this, either.
However, for many people, a deed in lieu of forclosure is a much less difficult
foreclosure alternative.

Who qualifies for a deed in lieu of foreclosure

Before most lenders accept a deed in lieu of foreclosure arrangement, you will have to
attempt to sell the house for a period of time —generally three months on the market
will do it. That is because the bank or lending organization would rather have you try to
sell the house than having to sell it on their own.

Filing a deed in lieu of foreclosure and tax considerations

There are also tax issues when you get your lender to accept a deed in lieu of
foreclosure. You may be perceived by the IRS as having made money on the deal via
your equity, and can be taxed on it. The lender will send a form to the IRS, and you will
need to make arrangements for dealing with the resultant tax —hiring a good
accountant is worth it in this case. In addition, there is an act that gives homeowners
relief from this taxation on some loans during the tax years of 2007, 2008 and 2009. A
deed in lieu of foreclosure is one of several foreclosure stop alternatives. Keep in mind
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thoughthat it does not save your house and you should thus see this deed in lieu as a
last resort. However, if you are unable to apply or do not qualify for any other
foreclosure stop method, ask your lender to accept a deed in lieu of foreclosure and you
will be spared the foreclosure process trouble. Your lender can facilitate the deed in lieu
of foreclosure form you need to file to start the process.
If you are facing an impending foreclosure, it is possible to stop a foreclosure process
by requesting a mortgage loan modification. Knowing that you could possibly manage to
keep your home and end up with reduced monthly repayments means you could find a
way out of your financial mess sooner than you think.

What is a loan modification?

If you are suffering under financial difficulties and you are struggling to keep up with
your repayments, you can request a mortgage loan modification in an attempt to help
you catch up any delinquent payments. Mortgage modification happens when your
lender allows modifications to the conditions on your mortgage. These may include
reducing your repayment amounts, extending your loan term or lowering your interest
rate.

Why would a bank want to accept a loan modification?

Banks do not actually want to foreclose on your home. They make far more profit by
charging you interest on the money you borrowed from them than they do by selling
your home at a loss. Therefore, it is in their interest to help get you back into a stronger
financial situation so you are able to continue repaying your loan.

How does a loan modification stop foreclosure?

By making an arrangement with your lender to modify the terms of your existing
mortgage, they will honor the agreement and allow you and your family to stay in your
home and work through your financial problems. This means they will avoid any
foreclosure proceedings for as long as you keep your newly modified repayments
current. A mortgage loan modification is one way of avoiding foreclosure.
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How do I apply for a mortgage loan modification?

In the first instance, you should put your proposal to your lender in writing. Your lender's
loss mitigator will want to know what you plan to do to put your financial situation back
in order. You should include information about your current income levels and the
amount of your bills and repayments in your letter. You should be honest with them
about your plans to either find new employment or find ways to improve your current
income levels. Let them know that if they approve your mortgage loan modification and
reduce your repayments you will have a much better chance of getting yourself back on
track. Do not be tempted to tell your bank a 'hard-luck' story - banks are not in the
business of feeling sympathetic. They will want to know that you are working towards a
logical, responsible solution to your problem.

Am I eligible for a loan modification?

Before you apply for any type of mortgage loan modification, you should be sure you
qualify for this kind of assistance. You should be able to verify that you are experiencing
temporary financial hardship or a change in financial circumstances, but you must not
have filed for bankruptcy. Your current repayments should also be at least ninety days
in arrears, although you must not have purposely defaulted on your repayments in order
to qualify. It is also important that the bank has not already begun foreclosure
proceedings before you send in your modification letter.

What is the difference between mortgage refinancing and a mortgage

loan modification?

Refinancing your mortgage to a new lender simply means you are moving your
mortgage from one bank to another. This does not guarantee you lower repayments or
a reduced interest rate. A loan modification means you stay with your current bank,
only the original terms of your mortgage are amended to help you with your financial
situation. This means that with a mortgage loan modification your amended conditions
are able to take place much sooner and usually with less fees involved.

Foreclosure Short Sale

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A foreclosure short sale is a realistic option in some cases. Indeed, despite popular
belief, banks do not want to foreclose on your home. They want you to repay the money
you borrowed and they want to continue charging you interest. It is how they make their
profits.
When you signed your mortgage contract, you promised you would repay the bank’s
money along with the resultant interest charges due.

If your financial situation has changed since you applied for your loan and you can no
longer meet your repayment obligations, then unless you have made other
arrangements to catch up any past due payments, the banks will begin to take steps to
foreclose on your home in order to recoup their money. One way for them to recover all
or part of the money you owe them is to accept a foreclosure short sale. Foreclosures
cost banks and lenders a lot more money than it makes them, so if you present a bank
with a viable option to recoup some of their money without the attendant costs
associated with foreclosure, such as a foreclosure short sale, then they are likely to
listen to your plan. It is for this reason that your lender may be willing to accept a short
sale process.

Short sale definition

Here is how to define short sale : The term short sale simply means you know you will
be selling your home for less money than you still owe to the bank. In a foreclosure
short sale, the bank or lender may consider accepting less than the total amount owed
to them.
You will need to demonstrate that you do not have the financial means to repay the
shortfall between the sale price and the remaining loan balance.

How a foreclosure short sale affects your credit rating

A foreclosure is a serious financial problem that will be listed on your credit report and
may remain there for up to 10 years. This will negatively affect your ability to access
credit for a long time to come. By comparison, a short sale process will still be listed on
your credit report, but it will only be noted as a debt that has been settled for a lower
amount than the full balance due. A foreclosure short sale listing on your credit report
will cause your score to drop, but not nearly as significantly as a foreclosure.
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What you need for the short sale process

If you think your financial situation could be helped by negotiating a foreclosure short
sale with your bank, then you will need to provide your lender with some documentation
to support your request.
• You will need to write a short sale hardship letter that explains adequately why
you believe a short sale will help you.
• You should avoid trying to win any sympathy in your letter. The bank does not
want to hear about how difficult your life it. They want to know how and if you
are going to repay the money you borrowed from them.
• They will also require copies of your income verification, such as pay slips and
tax returns.
• They will want to see your banking statements that give them an accurate
picture of how dire your financial situation really is.

The short sale process begins by making a formal request to your

lender

When you submit your request for the lender to consider accepting a foreclosure short
sale, a negotiator will be allocated to your file. You should be aware that the negotiator
is also trained to make alternative financial suggestions designed to help you keep your
home.
These alternatives to a foreclosure short sale could include repayment negotiations,
interest rate reductions, leniency periods and other avenues available so that you will
not necessarily have to sell your home for less than its true value. If you still believe
short selling is your only option for getting out of your financial mess without the stress
of a foreclosure, then a foreclosure short sale could be the ideal solution for you. Always
be sure to consult with an attorney regarding your rights and your obligations in a short
sale process. Due to the nature of a foreclosure short sale, the attorney’s fees are
covered by the net proceeds of the sale of your home, so these fees are deducted from
the final amount accepted by the bank.

Mortgage Forbearance
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Mortgage forbearance is a formal arrangement which your bank or lender may agree to
if your mortgage payments are delinquent. Even if your mortgage payments are
seriously past due, you may be able to avoid foreclosure with a loan forbearance
agreement.
No matter how heartless or cold the bank’s staff might seem, there is no bank in the
world that wants to foreclose on the family home. This is because banks have no
interest in selling real estate – they make their profits by lending you money and then
having their money repaid to them with an agreed amount of interest. When customers
default on those responsibilities that the banks rely on to make their profits, then they
are left with no alternative but to sell your asset in order to get back the money you
promised you would repay. Unfortunately, we all have moments in our lives where
things go wrong. Job lay-offs or illness can cause some major financial problems in
many people’s lives. Once your repayments begin falling behind it becomes harder and
harder to catch those payments up.

What is a mortgage forbearance agreement?

If you already know you are in financial distress, then it is important you call your lender
and discuss your options for mortgage forbearance immediately. Banks have dedicated
staff available who are trained to assist customers just like you to catch up past due
payments and hold off the foreclosure process for long enough to allow your account to
be put back in order. Your bank’s loss mitigator will assess your situation and discuss
what options you might have available. They will work with you to uncover any options
that can help you to actively avoid foreclosure, working towards a mortgage forbearance
agreement.

Who qualifies for mortgage forbearance?

In order to qualify for mortgage forbearance you may have to meet a few conditions. If
your repayments have been continually missed for ninety days or more, you should
receive a letter from your bank very soon – if you have not already. It is important that
you respond to this correspondence immediately as your response will instantly freeze
any foreclosure proceedings against you and your family home. During this foreclosure
freeze, your lender will work with you to actively bring your account back into line by
developing a payment plan designed to catch up with any past due payments. They will
take your financial circumstances into account and may even suggest further loan
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modifications that may help you in other areas. You should be aware that the mortgage
forbearance program is not available for investment properties or homes that are
currently vacant.
If your mortgage forbearance agreement is approved then you may be allowed to
postpone your monthly repayments for a minimum of four months, although your
agreement does not allow your delinquency to be longer than twelve monthly
payments.

Loan forbearance is not loan modification

Do not make the mistake of thinking a mortgage forbearance agreement is the same
thing as a loan modification. With a loan modification, your lender works with you to
either reduce your repayment amount or sometimes even your interest rate in order to
help you catch up your past payments, but will not allow you to postpone them.
If you think your financial troubles are temporary, contact your lender as soon as
possible as mortgage forbearance could be the answer to avoiding foreclosure.
Avoiding foreclosure means that you have to take resolute action, because the only way
that you will eventually be foreclosed upon is if you do nothing at all. So, unless you are
one of those people who had no business even getting the loan to start with, do not hide
from those scary letters in the mail. Do not ignore the ringing telephone.

Open communication with your lender

The first thing you can do to prevent foreclosure is, very simply, communicate.
Communicate early and often with your lender until you are current on your payments.
Lenders are people, too, and if you are honest with them about why you are late on your
mortgage payment they by all means want to work with you to resolve the
situation. Communicating prevents about 80% of potential foreclosures all by
itself.

Stop Foreclosure Process

Avoiding foreclosure means that you have to tell your lender that you were laid off. Tell
them you were slammed with medical bills that you believed your insurance was going
to cover. Tell them you are the victim of identity fraud and you had your bank account
cleaned out by a crook.
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Just communicate and be very honest about your predicament. Put away your pride and
tell your lender all the details of how bad things are for you.

Loss mitigation departments help prevent foreclosures

Next, if you are more than 30 days behind, contact your lender's Loss Mitigation
Department. All lenders have these, and they employ them for the specific reason of not
losing loans and their interest payments. These departments advise borrowers on what
their payment options are. Sometimes they are combined with the collections
department, so if you have to contact them do not panic if you find yourself talking to a
collection agent.

Overview of stop foreclosure solutions

Lenders have many ways of working with you to prevent your being foreclosed on.
Some of these options do include selling your home, but that is still not foreclosure and
you get some benefit out of the sale.
This list of prevention methods includes some where you avoid foreclosure and keep
your home and a second category where you sell your home in order to prevent
foreclosure.

1. Avoiding foreclosure and keeping your home

This is obviously the preferred method for avoiding foreclosure of most homeowners in
financial trouble.
• Communicating with your lender - We discuss it above and in the previous
avoiding foreclosure section.
• Reinstatement - You are completely caught up with one lump sum payment by
such and such a date.
• Loan forbearance - You pay less than your normal payment for a temporary
period and the lender agrees to accept this. Go to the mortgage forbearance
discussion to learn more about it.
• Repayment plan - You and the lender agree to divvy up your past due amount
into equal installment payments to be made over a period of time; often these
are added onto your normal mortgage payment until you are caught up.
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• Loan modification - A completely new mortgage program for the amount of
principal you still owe. Go to mortgage loan modification for more details.

2. Preventing foreclosure by selling your home among other methods

This is not the ideal strategy, but at least it avoids the upheaval of the foreclosure
process and allows you to keep a better credit rating.
• Short sale to prevent foreclosure - You'll use the proceeds to pay off all
outstanding principal and keep the rest; if you can only get an offer for less than
what you owe, the lender may still accept it and consider it a settlement by
taking all of the sales proceeds. Elsewhere we discuss the foreclosure short
sale solution in more detail.
• Deed in lieu of foreclosure - You voluntarily give your home to your lender and
they do not foreclose; they usually also give you a certain amount of time to
move out. Elsewhere we discuss the deed in lieu of foreclosure solution in more
detail
• Assumption - A deal wherein a qualified buyer takes over your mortgage and
the payments.
3. More foreclosure solutions and options for you
• FHA loan options - Ask your lender about these if you have an FHA loan.
• Chapter 13 bankruptcy - Elsewhere we discuss the chapter 13 bankruptcy in
more detail.
As you can see, a warning notice of foreclosure is not the end of the world. You have
many options left for avoiding foreclosure. The sooner you start reviewing and applying
realistic foreclosure solutions the more chances you have of avoiding foreclosure once
and for all.

Avoid Foreclosure

You can prevent foreclosure if you communicate properly with your lender, review and
apply one or more of the stop foreclosure methods we discuss below. First of all, you
have to be confident that you can avoid foreclosure. Keep calm and set yourself to
work.
The high number in home foreclosures in our time is to a certain extent due to the
unfortunate lending practices that many banks follow. Many people who should not
have been given a home loan or a mortgage were given one. These people are most at
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risk of losing their home. Now the problem for many people is that this foreclosure trend
makes them think that if they receive any notices of possible foreclosure procedures to
be brought against them, they are done for; they have no hope of saving their
home. The good news is that this is not true at all. There are several ways you can
apply to prevent foreclosure.

Lenders are interested in avoiding foreclosure too

You can indeed prevent foreclosure because lenders do want you to save your home by
getting current on your mortgage payments.
Lenders try to avoid foreclosures almost as much as you would. Foreclosures mean a
lender has lost money, and all that foreclosures are, besides being justice for you not
living up to your end of a contract, are a stop-loss measure for the banks.
Banks do not want your house and that is why preventing foreclosure is
realistic; they want you to keep paying back at interest. It is on those interest payments
that they make money, not on auctioning off your house. In addition to lost interest
payment revenues, banks lose an average of $40,000 in foreclosure process costs for
just one house.

So, what this means for you is, you can prevent foreclosure if you have any ability at all
to pay back your loan and get current on your payments. Most states have a grace
period law about loan and mortgage payments, which states that you are allowed to be
up to 30 days behind on one payment before any legal action can be taken against you.
Most lenders, since they really do not want your home, extend this to three months,
which is another help to prevent foreclosure. However, mortgage loan interest accrues
by the day; so, every day that you get farther behind in payments means you owe even
more money than you otherwise would. Nevertheless, this does not mean you will be
foreclosed upon.

Prevent foreclosure by communicating with your lender without delay

This is one of the first foreclosures solutions any homeowner in trouble should apply to
prevent foreclosure —the sooner the better. You will see that all reliable foreclosure
help organizations, whether from the government or private, recommend opening a line
of communication with you lender society as a first step to avoid foreclosure.
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For some homeowners talking to the lender seems so obvious that they do not even
think about it, others are scared to phone or meet their lenders. Try not to be.
In the next prevent foreclosure section we give you some tips to communicate with your
lender to prevent foreclosure, and highlight other stop foreclosure solutions for you.

Making Homes Affordable plan

Mortgage modification is finally available to millions of homeowners in distress.

Recently, the Obama Administration unveiled a plan that would make the mortgage
payments for current homeowners more affordable, allowing them to remain in their
homes. The primary goal is to stem the rate of foreclosures, which have swept the
nation in recent months.
Aptly termed the Making Homes Affordable plan, this program is a mortgage
modification plan funded with money allocated in the Troubled Asset Recovery Program
(TARP), which was passed by Congress last fall.
Nearly nine million responsible homeowners will receive assistance in the form of
mortgage modification through the Making Home Affordable plan. This plan provides
assistance through two distinct options: the Home Affordable Refinance program
and the Home Affordable Modification program.

Home Affordable Refinance Program

Available to assist four to five million homeowners who currently have an existing
mortgage that is owned by either Fannie Mae or Freddie Mac, the Home Affordable
Refinance program allows mortgage refinancing to borrowers with a solid payment
history so that they can take advantage of the current low mortgage rates.
Under normal circumstances, these homeowners would not be eligible for mortgage
refinance because of the lost value to their homes. To be eligible for this type of
mortgage loan modification, the homeowner must have a debt to income ratio (DTI) of
not more that 31% on a fixed, thirty-year mortgage.
The federal government will increase this DTI ratio to 38%. There must be less than
20% equity in the house and the loan can be for no more than 105% of the current
market value of the house.
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Home Affordable Modification Program

The Home Affordable Modification Program is for three to four million homeowners who
are considered at-risk of foreclosure on their mortgages held by banks and credit
unions, effectively reducing their monthly mortgage payments.
The guidelines under this mortgage modification provision are expected to become
standard industry practice for sustainable mortgage loan modifications. Such
a mortgage modification is related to foreclosure bailout loans as a whole.

Role of mortgage services regarding the mortgage modification plan

Mortgage loan servicers can modify mortgages that meet the following criteria:
• Loans originated on or before January 1, 2009
• First-lien loans on owner occupied properties
• Proof of income and owner occupancy status
The mortgage modification terms and procedures require participating servicers to
make reasonable efforts to modify all eligible loans. This program also comes with
incentives to servicers, lenders and responsible borrowers.
Servicers who modify loans receive $1,000 per mortgage modification. The lender
shares the cost of payment reduction.
Homeowners are eligible to receive up to $1,000 of principle reduction payments yearly
(up to five years) for making their monthly payments in a timely manner.
There are other programs designed by the government to assist homeowners including
the Hope for Homeowners program and the Streamlined Modification Program.
However, if you are a distressed homeowner, you could start by calling your lender to
find out how you can benefit from the mortgage modification strategy provided by
Making Homes Affordable.

Chapter 13 Bankruptcy

By filing a chapter 13 bankruptcy you have the option of developing a debt repayment
plan supervised by a law court. The main benefit when you file a chapter 13 is that you
are immediately free from legal court proceedings, dreaded collection calls and
garnishment court orders.
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Chapter 13 bankruptcy explained

When filing a chapter 13 bankruptcy you are actually asking a legal court to establish
contact with all your creditors and speak to them on your behalf so that you can make a
pause and consider the situation properly. In general, the repayment schedule specifies
that the debts included in the list must be repaid during the following five years.
Having said that, a bankruptcy court is free to act as it sees fit and it can also allow
more years to repay the debts. To come to a decision, they usually compare what you
earn every month to the amount of your monthly expenses. The court then determines if
you are eligible for a chapter 13 bankruptcy based on several pre-established rules.
Chapter 13 bankruptcy laws stipulate that you are allowed to file a chapter 13 if your
secured and unsecured obligations are not greater than a specific amount of money. A
bankruptcy attorney is the expert you most need at this point. He/she will analyze and
divide your debts into categories in order to asses if you meet the requisites and are
thus eligible.

Filing a chapter 13 bankruptcy

Many of the steps for filing a chapter 13 bankruptcy are the same as when you file a
chapter 7. You agree to a monthly repayment schedule that takes into account what you
earn and what you spend. You must also complete a credit counseling course which
teaches you about budget making and money managing. At the same time, the court
appoints a trustee that works personally with you and assists you in getting back on
track financially.
When you fill in the information regarding your personal finances, you must reveal
everything, absolutely every detail. You have to state all your creditors and income, your
properties and how much you spend every month on average.

Bankruptcy chapter 13 grants you freedom from creditors

The good news is that as soon as the bankruptcy lawyer files the bankruptcy
chapter 13 you get an automatic stay, which means that your creditors cannot
continue with their efforts to make you pay off your debts. No more stress or
anxiety about creditor calls. Your attorney and you then write down an acceptable plan
to pay off your debts and you submit it to the legal court where it has to be approved.
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As stipulated by chapter 13 bankruptcy law you deal with each debt class in a different
manner. It is up to the court to decide a priority level and where the first payments go.
The law court also establishes how to handle the collateral guarantees attached to the
secured debts in the framework of the payment plan.
Although the unsecured debts are listed in the payment plan, it is not compulsory to pay
them back within five years. Such a payment plan is based on the principle that you
keep a specific amount of money enough for regular living expenses, and use the rest
to pay your creditors.

Specific benefits of a chapter 13 bankruptcy

A chapter 13 bankruptcy has specific benefits that a chapter 7 does not have.

The main one is that if your home is already in the foreclosure process you can
nonetheless make foreclosure stop.
The repayment plan includes the due payments on your mortgaged home, which
implies that you have the opportunity to catch up.
According to chapter 13 bankruptcy rules you can also cut back your monthly payments
to pay back your secured debts.
We hope that the above chapter 13 bankruptcy information helps you to evaluate
together with your specialized lawyer if a chapter 13 bankruptcy is the best solution for
you.

Chapter 7 Bankruptcy

After filing a chapter 7 bankruptcy due to an overwhelming debt you are incapable of
paying you can start afresh. The chapter 7 bankruptcy law was thought for individuals,
partnerships and some corporations, although here we are mostly concerned with
individuals.
A chapter 7 bankruptcy is also called straight bankruptcy orliquidation
bankruptcy, which means that you liquidate assets in order to pay off your debts. Its
purpose is to discharge specific types of eligible debts. After a legal court discharges a
debt, the debtor is no longer responsible for the liability and he or she can have a fresh
start.
When filing chapter 7 bankruptcy, debtors should be aware that they cannot list every
single debt. According to the chapter 7 bankruptcy laws, some types of debt like child
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support or alimony are not eligible. However, for many people that do not have such
exempted debts, the chapter 7 bankruptcy allows them a fresh start.

Should you file chapter 7 bankruptcy?

As any other involuntary or voluntary bankruptcy, filing chapter 7 bankruptcy is a serious

matter that should be handled by a bankruptcy attorney or specialized bankruptcy
services. From the legal point of view, the chapter 7 bankruptcy laws are not particularly
complicated, but nonetheless, to file chapter 7 bankruptcy properly you must follow
certain proceedings and specific chapter 7 bankruptcy laws that are different in
individual states.
Generally, the type of debts individuals include when they file chapter 7 bankruptcy are
clear-cut debts like a mortgage, credit card debt, tax debt, and the like. This is why the
chapter 7 bankruptcy law that applies to them is not very complex, although it stands to
reason that this does not apply to every single individual debtor.
However simple it may appear to you, the debtor, you have to file the right bankruptcy
forms in the proper manner, and follow exactly the chapter 7 bankruptcy laws and
deadlines.
For instance, your bankruptcy lawyer knows that he or she has to submit a petition to
the bankruptcy court formally requesting the chapter 7 bankruptcy along with certain
financial schedules that specify your expenses and your income. In addition, the court
also wants a copy of the tax returns covering a certain number of years.

Chapter 7 bankruptcy information

When filing a chapter 7 bankruptcy, one of the requirements is that you attend a credit
counseling course. In this Internet era, debtors are often allowed to complete this
course online, which simplifies things for them.
Keep in mind that there are some legal fees associated with the chapter 7 bankruptcy.
However, if you cannot afford them, your bankruptcy attorney is entitled to ask the
bankruptcy court to allow you to pay those fees in affordable installments.

Essentials of the chapter 7 bankruptcy law

According to the chapter 7 bankruptcy laws there are some types of assets that are
considered exempt property. Actually, each state can determine what an exempt
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property is. Your attorney's job is to select the most convenient definitions so that you
get the maximum relief. This is another reason to work together with a qualified
bankruptcy lawyer.
After filing chapter 7 bankruptcy you will see that the debt collection calls and efforts
cease very fast. This is a legal concept called automatic stay. It puts an end to phone
calls, garnishments, lawsuits, levies, etc.
For this very reason, it is crucial that you take good care to compile an exhaustive
list of all your creditors, and include all of them in your financial schedule. If it
happens that you are not completely sure that you have a certain debt, include it all the
same to prevent the stress of any collection calls and efforts in the future.
Under chapter 7 bankruptcy law, the bankruptcy court appoints a trustee to manage
your liquidation case. This trustee will organize a meeting with all the creditors, where
your debtors will be able to argue why they think the debt you owe to them should not
be discharged. In this creditors' meeting the trustee may ask the debtor, questions
related to the debts and anything the debtor has listed on the financial statements you
submitted.
Filing chapter 7 bankruptcy is the most common way for individuals overwhelmed by
debt to start a new financial life free from the burden of unmanageable debts. As we
said above, filing chapter 7 bankruptcy is a serious matter that a debtor should only take
after careful pondering and consultation with a qualified bankruptcy attorney.
A specialized lawyer will recommend what is best for you, filing chapter 7 bankruptcy or
perhaps chapter 13 bankruptcy.