NEW FEDERAL LOAN MODIFICATION RULES NOW WORK WITH

BANKRUPTCY LAWS & ORLANDO BANKRUPTCY COURT’S CHAPTER 13 MORTGAGE MEDIATION PROGRAM

As of June 1, 2010, new HAMP rule changes now make it possible to seek mortgage modification while in an active bankruptcy case.  Under prior U.S. Treasury rules, mortgage lenders are not required to consider modifications under the federal government’s Making Home Affordable Program (HAMP) while a homeowner is in an active bankruptcy case; however, these rules have now changed and they will prevent lenders from saying no to mortgage modification during bankruptcy cases. 

This will make it much easier for homeowners to seek modification of their mortgages and save their homes while adjusting and discharging other debts in a single proceeding.  The rules also allow use of the schedules filed in the bankruptcy case to be used as the modification application and other streamlined procedures that will make it easier to communicate with lenders and avoid the typical runaround homeowners get when trying to modify their mortgage. It also gives the homeowner the added protection of a Court Order approving loan modifications to prevent future mortgage problems caused by the mortgage company.

In the Orlando Division of the Middle District of Florida, the U.S. Bankruptcy Court has also just launched a Mortgage Mediation Program to bring mortgage lenders to the negotiation table and offers sanctions against mortgage lenders who refuse to participate.  I currently serve on the Subcommittee with the Chapter 13 Trustee to help make this new Mortgage Mediation Program a success in the Orlando Division.  This will make the lender come to the table!

These new Treasury rules and the Orlando Bankruptcy Court’s Mortgage Mediation Program make filing a Chapter 13 Bankruptcy case a much better option to seek mortgage modification and stay other creditors at the same time.  It can also allow for the “stripping off” of second mortgages if the current home value is less than the amount owed on the first mortgage, lowering car loan payments and a minimal if any payment to unsecured credit card debts.  A homeowner who files for Chapter 13 Bankruptcy to reorganize may emerge from the case with a modified first mortgage, a second mortgage that is gone forever and be otherwise debt free upon plan completion and discharge.

Finally a rule change to help the Florida Homeowner save their home. Most homeowners I meet with here in Central Florida need a mortgage modification AND bankruptcy relief and now it is possible to get both types of relief at the same time. I believe this will really give homeowners a better chance to save their homes and resolve other debt problems through Chapter 13.

To learn more about how these new HAMP rules and Bankruptcy Court Mediation in the Orlando Bankruptcy Court may help you, visit my website www.legalquestion.com or call me toll-free at 888-841-3588 for a free consultation.  You can also visit our Facebook fan page and follow me on Twitter at www.Twitter.com/BakerLawFL for up to date information.

Principal Reduction on Mortgages.  This Reuters Article/Blog finally discusses principal reduction being on the table for Fannie Mae and Freddie Mac...about time!

http://blogs.reuters.com/james-pethokoukis/2010/08/05/an-august-surprise-from-obama/?cp=5#comment-8818

Look folks...the blame game is pointless.  Stabilizing the US Housing Market is the KEY to ending the recession.  If the cramdown bankruptcy bill would have passed in May 2009, the real estate market would already be stable and more people would have kept their homes...this is just an executive version of that bill.  

Hey, we've already paid Fannie & Freddie the $75billion.  The bankruptcy cramdown would have done the same except not on the backs of taxpayers.  Thank Republicans for the extra TAX! 

Many members of Congress already got their $$$ from the banks so cramdown failed.  Wanna blame somebody, blame the GOP, Big Banks and their stranglehold on Congress for many years before President Obama.

The irony is when we try help THE PEOPLE, it's a handout....when we help the banks, its a bailout!  This is non-sense.  Moral problem if it's a US Citizen but no moral problem when a bank walks away from a bad investment.  The only reason people are walking away from their homes is they are now thinking like bankers...it's a business decision.  This gives them a reason to keep paying and keep their home!  Consumer Bankruptcy Attorney Richard R. Baker, Orlando, Florida www.legalquestion.com

Three Reasons Why Upside Down Homeowners Should Consider Bankruptcy http://bit.ly/9fXgln 

Another good blog that ties in with a recent blog I wrote on this very issue.

Three Personal Finance Mistakes That Lead To Bankruptcy http://bit.ly/9u2fAC  

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Central Florida Consumer Bankruptcy Attorney Richard R. Baker www.legalquestion.com

You have options and you have rights so...KNOW your options!

The new reality of the housing market; too upside down!  South Florida is no different from Central Florida.  Nobody wants to surrender their house in a bankruptcy but if you cannot modify through Chapter 13, it may be the last option.  http://fb.me/zxFeURmA 

I don't agree with the news anchor at the end.  It will not take four years to buy another home.  That is where his ignorance on the power of a bankruptcy discharge is obvious.  The Attorney paints a much more accurate picture. Richard R. Baker, Esq. www.legalquestion.com

Good video on why you cannot ignore Foreclosure in Florida. Roy Oppenheim discusses Florida Deficiency...http://fb.me/BXBEYf8I

In a recent report issued by the Treasury Department under the Making Home Affordable mortgage modification program, it is clear that too many mortgage modifications fail, are denied or re-default later.  After reviewing the data, I believe that the main reason this happens is because Debt to Income Ratio is too high.

In other words, because most people have other debt issues in addition to their mortgage problem, that "other debt" makes the mortgage modification almost impossible to sustain...unless

You modify you mortgage as part of a Chapter 13 Bankruptcy Case.  

A few of us Orlando Bankruptcy Attorneys are working with the U.S. Bankruptcy Court in Orlando, Florida to refine the Court's new mediation program.  You see, without addressing the other debts too, it is hard to make a HAMP modification work.  But when you can have court supervision, can adjust other debts and take many of those debts out of the equation, you get a clear picture of what income is really available to pay on the mortgage.

Consider this:  if you can lien strip off your second mortgage, adjust car loans, pay very little to unsecured credit card debt, modifying your mortgage as part of a Chapter 13 bankruptcy case will give the overwhelmed homeowner the best chance at keeping their home.  

For more information on how this Bankruptcy Court Mortgage Mediation Program will work in Orlando, contact Consumer Bankruptcy Attorney Richard R. Baker at www.legalquestion.com or call 888-841-3588 or 407-647-8833.

http://ezinearticles.com/?New-Federal-Loan-Modification-Rules-To-Now-Work-With-Chapter-13-Bankruptcy-Laws-&id=4353662