Home Foreclosures

Good news for thousands and thousands of homeowners who are currently facing foreclosure or may soon be facing foreclosure.  The Wall Street Journal reported that effective Saturday, October 9, 2010 Bank of America halted all pending foreclosures.  Just a few days ago I wrote about Bank of America’s decision to halt foreclosures in the 23 states that utilize a judicial foreclosure process.  Now the moratorium is nationwide.

This is good news if you are facing foreclosure!

My encouragement to Bank of America customers is to use the time created by this moratorium productively.  If you are way behind on your payments, then you have got to address the arrearage proactively. This could mean going ahead and filing a Chapter 13 case and refinancing the mortgage in that way.  The point of course is that the moratorium will end probably sometime in the next 60 to 90 days.  If you simply say to yourself, “Whoohoo, the heat’s off” that alone will not get you in a better position to keep your home.

Often a Chapter 13 Bankruptcy is the best solution to work through the foreclosure process and protect a family’s home.  In a Chapter 13 a homeowner can cure payments that are in arrears and reinstate the mortgage as well as address the other indebtedness owe by the family.

If you are working on a modification of your loan keep working on it.  However, it you’ve got more financial problems than just with your home loan then perhaps a Chapter 13 bankruptcy is a good solution.  An experienced bankruptcy attorney can help you with the analysis.  One of the things I’ve found after filing bankruptcy cases in Knoxville and Sevierville for over 25 years is that sometimes families need an independent review of their finances in order to determine the best course of action.

At least today we don’t know if other banks will follow suit.  JP Morgan Chase followed Bank of America in the first moratorium that just covered 23 states.  We can watch over the next few days to see if they or others follow Bank of America’s lead.

These are certainly interesting times.

Photo Credit:  Flickr: Respres