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Mortgage Modifications for Customers Whose Mortgages are Current

Banks are turning their backs on millions of Americans whose homes are in foreclosure. At the same time, several large banks are approaching borrowers whose mortgages are not in default and offering to reduce their debts or modify the terms of their mortgages.

JP Morgan Chase and Bank of America, two of the largest financial institutions in the United States, have been contacting borrowers whose mortgages are up to date, offering them special deals. The borrowers being contacted by these banks have pay option adjustable rate mortgages. These banks seek to eliminate as many of these mortgages from their books as possible.

The banks approach individuals whose homes are underwater, but who are current on their mortgage payments. While many borrowers who are in deep financial trouble need help, the banks are ignoring these situations. Instead, they’re making unsolicited contacts and, in theory, rewarding the customers who have done right by them.

Dan B. Fraham, a spokesman for Bank America, recently stated “by proactively contacting pay option ARM customers and discussing other products with better options for long term, affordable payments, we hope to prevent customers from reaching a point where they struggle to make their payments.”

In theory, the banks have decided to make deals regarding mortgage loans that gives borrowers the option of skipping the principal payments and some of the interest payments for a period of several years. Thereafter, the unpaid balance is added to the principal of the loan. The banks are concerned that if these underwater loans go, eventually the homeowners simply abandon them. This is a great deal for these homeowners who’ve kept their loans current. Unfortunately, this ignores approximately 33% of the outstanding mortgages that are either in default or underwater!

Long Island and New York City Foreclosure Defense

The Law Offices of Schlissel DeCorpo handles foreclosure defense for homeowners. We litigate all aspects of foreclosure proceedings including, but not limited to, defective foreclosure lawsuits,defective mortgages, predatory lending issues, bad faith, and other real estate legal issues. We attend foreclosure court conferencesfor the clients we represent. We also assist our clients in the preparation of mortgage modification applications, as well as deal with mortgage modification programs that are unresponsive to our clients’ needs.

In certain situations, foreclosure related bankruptcies can be utilized to stop foreclosures from moving forward. Upon filing either a Chapter 7 or a Chapter 13 bankruptcy, the bankruptcy court issues an automatic stay that stops the foreclosure lawsuit from moving forward. It should be noted that bankruptcy proceedings are brought in the United States Bankruptcy Court, while foreclosure proceedings are brought in New York State Courts.

For our clients who file bankruptcy, we can sometimes eliminate second mortgages. We also can assist our clients in re-establishing their credit after filing bankruptcy. Should you have questions as to what type of bankruptcy would be appropriate for you or whether there is other alternatives related to foreclosure defense, feel free to contact us. At your initial free consultation, we will discuss all of your foreclosure options. We look forward to seeing you again on our foreclosure blog.

Underwater Mortgages Keep Rising

The high level of unemployment in the United States, coupled with the increasing foreclosure rate, is leading to a reduction in the value of homes. The percentage of Americans who owe more on their mortgages than the value of their homes continues to rise. This is causing more and more homes to be underwater. “Underwater” refers to a home having a greater mortgage indebtedness on it then its actual value.

There are 11 million families, which represent 23% of all foreclosures in the United States, that have mortgages that were underwater during the last quarter of 2010. That was an increase from the previous quarter, in which 22.5% of the homes in foreclosure in the United States were underwater. This is the third quarter in a row where the number of homes underwater have increased.

Underwater Mortgages Leave Homeowners with Few Options

When the mortgage on a home is underwater, a homeowner has few options. The homeowner won’t be able to qualify for mortgage refinancing. They simply must continue making the payments on their property and hope that it will eventually start appreciating in value and be worth more than the indebtedness on it.

Experts expect that home prices will continue to fall throughout the 2011 calendar year. The greater the percentage of homes in a given area that are underwater, the more significant impact they have on the valuation of homes in general for that area. As homes in a locality fall into the category of being underwater, they tend to bring down the values of the neighboring homes too.

Purchasing a Home in Today’s Market

To obtain a conventional mortgage, most financial institutions require the perspective homeowner to put down 20% of the purchase price of the home. In today’s economic situation in the United States, with falling salaries, high unemployment and high foreclosure rates, few perspective homeowners fall into this category. The down payment requirements for prospective new home buyers is having a negative effect on the housing market. President Obama’s administration seeks to have all perspective homeowners provide a minimum of a 10% down payment before they can obtain a conventional mortgage that is guaranteed by either Fannie Mae or Freddie Mac.

The amount of negative equity in the United States in the last quarter of 2010 increased from $744 billion nationwide to $751 billion nationwide. This is a major step in the wrong direction! Families, at one time, measured their wealth by the equity in their home. Today, home ownership means you have an asset that is decreasing in value!

Foreclosure Defense Attorneys on Long Island

The Law Offices of Schlissel DeCorpo handles foreclosure defense litigation. We submit detailed answers to summonses and complaints filed by financial institutions. We litigate defective foreclosure lawsuits, predatory lending, defective mortgages and bad faith by financial institutions. Our office in experienced in handling real estate litigation. If a case is in litigation, our attorneys will attend foreclosure court conferences on behalf of our clients. We also maintain a foreclosure blog that contains articles concerning foreclosures, mortgage modification issues and other issues effecting homeowners. We also file Chapter 7 and Chapter 13 bankruptcies which stop foreclosures and can have an impact on eliminating second mortgages. We can also assist our clients in re- establishing credit.

Feel free to call us if you are having difficulties with your financial institution, paying your mortgage or in dealing with a foreclosure issue.

Foreclosure Defense in Valley Stream, Lynbrook, Baldwin, Malverne, Freeport, Oceanside, Long Beach, Elmont, Lakeview, West Hempstead, Hempstead, Merrick and Bellmore, New York

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We represent individuals throughout the New York Metropolitan area with divorce and child custody, personal injury, car accident, wrongful death, estate administration, nursing home and medicaid issues

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