Many people have the dream of owning their own home. At David R. Black’s Bankruptcy Legal Group in Media, PA, we are committed to helping clients deal with mortgage foreclosure and keep their homes.
What is a mortgage?
A mortgage is a type of loan for property or a home. All mortgages involve making payments over a set number of years. In a home mortgage, the lender pays the seller for the house and you, the borrower, in turn pay the lender. The lender secures the loan using the house as collateral and issues a lien on the house. Lending institutions offer many types of mortgages that have different interest rates and payment agreements.
What is mortgage foreclosure?
When a homeowner defaults on mortgage payment, the lender can foreclose based on terms of the mortgage security agreement. Foreclosure is a lawsuit filed with the court that allows the lender to make good on the lien and repossess a home when the homeowner fails to make payments.
Ways to prevent mortgage foreclosure
Today mortgage companies bundle mortgages and sell them to trust banks who sell them to other banks as investments. Only the mortgage owner can foreclose. One defense against mortgage foreclosure is to demand paperwork that shows the investment trail and verifies ownership. In some cases, the administrative work is so lacking that ownership verification is not possible.
Filing bankruptcy is another way to deal with foreclosure. The automatic stay that goes into effect when you file bankruptcy delays any foreclosure on your home while bankruptcy is pending. When you file Chapter 13 bankruptcy, you can incorporate past due mortgage payments into your three or five-year repayment plan and keep your house. A Chapter 13 can also help you eliminate second or third mortgages. The complete home value secured the first mortgage you took out on your home. If your real estate value dropped (which, during recent years, many have) there may be no equity to secure the second or third mortgages. Therefore, these mortgages are unsecured loans, which Chapter 13 often eliminates as unsecured debt.
Contact David R. Black's Bankruptcy Legal Group today
Arrange a free consultation with a bankruptcy attorney at our law firm. Call (866) 491-6275 or contact us through our web form. We represent individuals throughout the Delaware and Chester County area.