Consumers Taking Advantage of Foreclosure Crisis, Using Bankruptcy to Force Loan Modifications.

Oct. 16, 2010 - PRLog -- But, this seemingly negative news has a tremendous potential upside for smart homeowners. Bankruptcy pushes a homeowner’s mortgage out of the loan servicing department into the bank’s bankruptcy division. Typically staffed by legal professionals, responsible for limiting their Bank’s potential legal liabilities, the bankruptcy division has far more leverage in negotiating principal reductions, interest rates and loan terms than any of the bank’s “loan modification” representatives.

With all 50 State Attorneys General joining forces in an on-going investigation of mortgage servicing procedures, Bank of America, JP Morgan Chase and GMAC are all reported to have instituted temporary foreclosure moratoriums throughout the entire country. Given the current investigations, homeowners filing bankruptcy may finally have enough clout to help encourage their bank to genuinely modify their loans. Once the homeowner and bank have agreed to new mortgage terms, the new loan is reaffirmed by the bank and the homeowner, under the supervision of the U.S. Court’s Bankruptcy trustees. As long as the homeowner honors the new payment terms, the loan modification is truly permanent.

With many homeowners failing to realize that receipt of  a “Notice To Accelerate,” means the bank has initiated the foreclosure process, while, in many cases, simultaneously informing the homeowner in writing that they have been qualified for an affordable loan modification, it’s critical that homeowner’s recognize this seemingly opposing actions for exactly what they might be. Potential Fraudulent activity. Per the website, http://wscottbankruptcyriverside.com/, banks often engage in this kind of conduct because of state laws requiring lenders to offer loan modification prior to foreclosing. (For more insight into bank doublespeak, please read, “Is Your Mortgage Lender Telling You The Truth About Your Loan Modification?)
With the Obama administration refusing, point blank, to implement a nationwide foreclosure moratorium, it is critical that consumers use the most affordable, legal recourse available to help prevent their banks from unfairly seizing their homes. Bankruptcy may actually offer homeowners more solutions than they might ever have realized.

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With over 40 years experience practicing bankruptcy law in the state of California, The Law Offices of Walter Scott truly understand our clients needs. The need to be heard, respected and responded to. In a timely manner. By caring professionals.