We believe that the housing crisis has not reached its peak as of yet. While foreclosures and foreclosure sales have slowed in recent months they will increase once the legal hurdles that have been encountered are straightened out. For instance the Robo-signing was unnecessary and the banks attorneys have figured out how to avoid the problems they were having. There are issues with MERS, but it is not likely to present irreparable problems for the banks. The fact is that despite the slip-shod paperwork and willy-nilly assignments of mortgages that took place, the courts are not likely to give homeowners a free ride. What we believe needs to happen is a widespread mechanism to reduce mortgages that are in excess of the value of the home. The government has toyed with this idea, but there is nothing in place today.
Alternatively, congress needs to provide the bankruptcy courts with the power to reduce the principal on residential mortgages. According to a New York Times article on August 25, 2011, Obama is weighing a refinance plan that would lower interest rates to 4% saving homeowners an estimated 85 billion dollars a year. It is unclear how such a plan would work.
Further the Times reports:" A broader criticism of a refinancing expansion is that it would not do enough to address the two main drivers of foreclosures: homes worth less than their mortgages, and a sudden loss of income, like unemployment. American homeowners currently owe some $700 billion more than their homes are worth" NY Times Aug. 24, 2011.
Facing a legal matter such as home foreclosure can be a very devastating and life changing event. At our firm, we have assisted numerous homeowners save their homes from foreclosure by seeing if they are eligible to file for bankruptcy. Contact a Westchester County bankruptcy attorney and discuss your financial situation today.