The North Carolina Bankruptcy Information Blog

With the blooming beautifully manicured landscapes, fresh-cut lawns and new signs of curb appeal, Spring used to be prime time for home buying. But with all of the hoops that potential homebuyers now have to jump through just to begin the process, tis the season of one in three Americans walking away from the actual home buying experience without an actual mortgage.

According to the financial experts at WalletPop, “Understanding the mortgage process and meeting lenders’ more stringent qualification requirements have become big obstacles for applicants, according to a survey [MortgageMatch.com] conducted. Most recent home buyers – 70% – described the mortgaging process as more difficult than they expected.…

We recently shared a sampling of the Federal Trade Commission’s recent tips for saving your home amid the financial fears of foreclosure. Being proactive, applying for a loan modification, and working directly with your mortgage servicer to for a better financial future in your own home sweet home.

But amid this timely advice for those seeking shelter from those who might otherwise take theirs, it’s worth mentioning news that when banks won’t help a beleaguered borrower modify his or her mortgage, scammers are stepping in to take advantage of these households in need.

According to a new report from Laura Bassett of The Huffington Post, an “elaborate network” of affiliated con artist companies, operating under such names as “Save My Home,” “Save My Home Now,” “Express Modifications” and “Express Home Solutions,” have become very good at making bad promises to average Americans that, in exchange for thousands of dollars, they could, in return, get their paying clients lower monthly mortgage rates 60 to 90 days.…

To commemorate the Federal Trade Commission’s annual National Consumer Protection Week (March 6 – 12, 2011), the FTC is providing a budget-load of handy-dandy information designed to protect your money, your credit, and your overall post-recessionary financial future. So whether you’re rebuilding your economic life post-bankruptcy, or simply trying to speed up your savings, the NCPW blog can yield a wealth of resources exactly at a time when average Americans need a financial infusion, including information about:

• Avoiding foreclosure rescue and other mortgage-related scams;
• Knowing how to spot employment opportunity scams;
• Making the most of your money in the early stages of your career;
• Building and maintaining a budget to improve financial stability;
• Avoiding time-share and credit-card scams offered via text messages; and
• Learning what steps to take to save your home from foreclosure.

…

One of the most widespread effects of the current housing market malaise is the “curse” of negative equity. This now ubiquitous occurrence of the real estate reckoning is a product of an underwater universe wherein a good number of houses all across the country are valued as less than what homeowners originally paid for them. And the effects aren’t just being felt in California, Las Vegas and Arizona, but are also drowning homeowners right here in the Deep South.

In fact, according to a new article by The Miami Herald, there have been dark clouds over the Sunshine State’s real estate markets for some time now as house-loads of average Americans face little light at the end of the otherwise tropical tunnel.  For these Floridians, the crash of the housing market is personal.…

As countless bankruptcy clients in this country have made clear, seeking the debt dissolution solutions of a personal bankruptcy can help free up finances that help with home mortgage payments—even amid the real estate reckoning of the recent recession—and, as such, aid many households in avoiding the perils of foreclosure.

But now the proof is in the reporting.

In a report released Tuesday, New York Federal Reserve researchers Donald P. Morgan, Benjamin Iverson and Matthew Botsch determined that there is a direct link between the October 2005 change in bankruptcy laws via bankruptcy abuse reforms (or BAR)—a change that made it more difficult for ordinary Americans to eliminate debts in bankruptcy—and approximately 116,000 additional subprime mortgage foreclosures in 2006.…

Amid the lingering national housing crisis, many renters may have felt that they had gotten away relatively unscathed in these tough economic times, avoiding underwater housing prices, high interest mortgage fluctuations, and the fear of foreclosure from lenders eager to toss unwary debtors from their humble (or not so humble) homes.

But in 2011, many renters should be aware of a new worry of their very own in the coming year: tenants who get behind on their housing payments will begin negatively impacting their own credit rating. That’s right. According to Lynnette Khalfani-Cox of WalletPop, Experian, one of a trio of primary credit bureaus, has recently started collecting consumer rental payment information for the purposes of including that very data in its credit reports.…

Even though the Triangle is one of the better performing real estate markets in the country, even being named by Newsweek as one of the Top 10 Places in America Poised for Recovery, it wasn’t enough to buoy the state’s foreclosure rate, which has surged during 2010.

In October, the foreclosure rate jumped more than 40 percent when compared to the same time last year. This was supposed to be the year of rebuilding, the year the recession slowed. RealtyTrac, a real estate data service, also reported that the number of foreclosures in October was 13 percent higher than September.

Oddly enough and accolades aside, our state is running contrary to the national foreclosure trend, which is down 4 percent from September.…

Just a few years ago, home ownership was something available to just about anyone—an economic reality that to an extent, contributed to where we are today. Nevertheless, the mortgage boom helped a lot of people realize that benefits of home ownership. It’s simply too bad that it came with so many hidden financial pitfalls, many of which have subjected sub-prime borrowers (and also those with standard mortgages) to serious, long-term hardships.

Today, almost the exact opposite has become reality. Mortgages are exceptionally more difficult to obtain and when they can be approved, the houses themselves don’t qualify because of drastically diminishing real estate values.…

In this economy, qualifying for a bank loan or line of credit can feel impossible—even for people with perfect credit—and much more so if you’re trying to bounce back from a recent bankruptcy. But a bit of patience (targeting smaller community banks rather than large corporate banks) and a bit of help (getting others to vouch for you) can improve your odds tremendously—even in this uncertain economic climate.

As Robert C. Seiwert, senior vice-president of the Center for Commercial Lending & Business Banking at the American Bankers Association told Businessweek,  “A bankruptcy can hurt your chances of getting new credit for at least seven years.…

So the impact of your bankruptcy is settling in. You have mixed emotions but underneath, feel confident that it was the right thing to do. The phone has stopped ringing, the mailbox delivers good news (for the most part) and best of all, you can sleep again.

Now that it’s time to get back on track, saving money should be a top priority. And one way to do that is by examining what it takes for you to keep a roof over your head every month, even if you managed to avoid foreclosure. Today, thanks to the real estate crisis which saw developers nationwide building new home homes and apartment communities on every plot of improvable land, it is a buyer’s market.…

The New York Times recently published an insightful article detailing the struggles of homeowners facing foreclosure in the outer boroughs of New York City. At the New York State Supreme Court building in Jamaica, Queens, they come face-to-face with the lawyers representing the banks and the loan servicers that are pursuing foreclosure on their homes. These lawyers oversee large caseloads and don’t appear to the Times reporter have the time to delve into each individual matter.

New York state lawmakers have passed laws requiring lenders to negotiate with homeowners in court. That’s why the court’s docket is full of homeowners facing foreclosure.…

One of the greatest benefits of filing for bankruptcy protection is that it allows struggling homeowners a second chance to catch up on missed mortgage payments. For many people, the fear of losing a beloved family home is one of the most stressful parts of their struggle with debt. But is your house really worth saving?

If you find yourself living in an “upside down house,”  it may be worthwhile to consider simply letting the house go. “Upside down” refers to a property where you owe more money than the house is worth. Back when the housing  market was still booming, this situation was almost unthinkable, but now that the bubble has burst, short selling―selling a home for less than what is owed―is all too common.…

The economy is so grim right now it’s hard to see the silver lining, but the good news about markets is that they rarely stand still forever. Even now, economists are slowly and cautiously becoming more optimistic about the situation, and consumers are gradually gaining back confidence. The housing market, for example, posted a quarterly rise in prices for the first time in three years, which may indicate a stirring of recovery. Still, there are a lot of homes out there not worth half what they were recently, and new construction has ground to a halt for the time being. Is there a silver lining in this one for you?…

It’s a couple of years after your debts were discharged in a Chapter 7 bankruptcy, you’re on track with your payments and expenses, and you’ve been working steadily to rebuild your credit. Now you’re ready to buy a new home: you’ve done all the homework, you’ve looked for good lenders and you’ve found your dream house. All you need now is to borrow what the house is worth, right? Well, not quite. If you have had some negative history on your credit report since your bankruptcy, you may need to come up with as much as 30% of the value as a down payment in order convince a lender to extend a loan to you.…

If you have declared under Chapter 13, you may be eager to refinance your home. In doing so, you should pay close attention to what the mortgage companies are proposing and whether you will actually benefit from refinancing.  It is a good idea to research companies offering refinancing during Chapter 13 and analyzing their track records with consumers. You can do this through debt advocacy organizations and state agencies that act as business watchdogs.

If you are finished with repayment under your Chapter 13 and have received your discharge, the refinancing process will resemble the process following a Chapter 7. You should work patiently to rebuild your credit with tried and true strategies and patience so you can get the best possible rate.…

So you’ve had a few mishaps lately in your financial life– like just about everybody else in America. And you’ve been working really hard to keep up the juggling act: spread the minimum amount of money around to the maximum number of creditors to appease them until you finally get a break. But that pesky mortgage payment is mucking up your system. It’s so much larger than the rest of your bills, and, therefore, so much easier to fall behind on. The merciless late fees aren’t helping the matter. Before you know it, you find you’re four months behind and the prospect of ever catching up with the missed payments seems like a pipe dream.…

Buying a home after bankruptcy is a smart move. And yes, it is possible! If you don’t own a home already, buying a house is an excellent step toward rebuilding your financial life. A home can be a great investment because it is one of the few major assets you will own that will hopefully appreciate over time. Home ownership also demonstrates stability, which can reflect positively on your credit profile.

The good news is, as soon as a year after your debts are discharged in a Chapter 7 bankruptcy, you may be eligible for a good car loan, and just two years after completing a bankruptcy, you may become eligible for a home mortgage with a good interest rate.…

Many people own a home before they file for bankruptcy protection, and once they are ready to start over and lay down that solid financial future, they will want to refinance their home loans. Refinancing a home can result in excellent benefits for a home owner.  By refinancing, you may be able to improve your cash flow by lowering monthly payments and reduce future risk associated with variable rates. The steps toward this process will differ depending on the type of bankruptcy filed and certain other factors. For both Chapter 7 and Chapter 13 bankruptcies, a common and crucial first step after bankruptcy is to carefully rebuild credit.…

Scam artists sure are brave. Well, there are probably more accurate ways to describe those who deliberately take aim at people in dire financial straits. They just are not fit to be published.

Turns out the Federal Trade Commission has spotted a series of deceptive Internet advertisements that claimed to lead browsers to the “official” Web site of the recently introduced Making Home Affordable program, a national effort that provides free mortgage loan assistance and encourages banks and lenders to help homeowners stay afloat. The actual official Web address is http://www.makinghomeaffordable.gov/

The FTC promptly filed a court order to halt the misleading ads that were popping up on some of the most popular search engines, such as yahoo.com, msn.com and altavista.com.…

Bankruptcy gives you a fresh start; a relief from the stress and uncertainty about your future. Your hope is that things will soon be back to normal. But that hope is often based on the answers to so many questions. For many, one of those questions may be about your ability to buy a home. You may have heard the myth that a bankruptcy is a black mark on your credit, and that you will never be able to buy a home. Don’t believe it for a second! You can buy a home after bankruptcy. With some time and planning, it will be much easier than you think.…