Asian Journal- The Filipino-American Community Newspaper

ARE foreclosures starting to decline or are they expected to increase in 2010? Of course, I’m no economic expert but from what I’ve been reading, it seems like most experts agree on their conclusions. Are you interested in finding out what they have to say? Keep reading.

According the Mortgage Bankers Association, one in seven loans was past due as of September 30, 2009, the highest level it’s ever been over the last 37 years! The continuing surge in delinquencies is apparently driven by a worsening job market as the unemployment rate rises and more and more people realize that they can no longer afford their mortgage payments.

With home values continuing to decline, it is now reported that the rate of mortgage abandonment has reached almost 25%. Experts suggest that there will be 17 million more foreclosures over the next 5 years. Banks continue to tighten their lending policies and just a few days ago, a bill introduced in Congress that would have allowed bankruptcy judges to modify mortgages of distressed homeowners failed to get enough votes to pass. If passed, this bill could have had a major impact on stemming the tide of foreclosures expected over the next few years. (Apparently, our lawmakers still don’t see the urgency of the situation.)

Most homes now in foreclosure are both fixed and adjustable rate mortgages. In my article last week, I also talked about how slow and frustrating the loan modification process has been under both the Obama plan and the lender’s own modification programs. A lot of homeowners have been desperately waiting for an answer for months on their loan modification requests and the lenders and mortgage servicers have been very slow in responding.

From what I’ve seen, a lot of people have also been either misled or given false hopes that they will be approved, only to find out a few days before the foreclosure sale that their request has been denied. Of the 728,000 homeowners who are in trial loan modifications, only approximately 32,000 have been given permanent loan modifications. That means that there are still about 700,000 homeowners (who are fortunate enough to even be given a trial period) whose fate still hangs in the balance. But what about the thousands of other people who have also applied but have not received a response from their lender at all?

So this big foreclosure mess may be far from over. As I tell a lot of people who come to my office for help, it is best to know and understand what all your legal options are, the sooner the better. In some cases, filing a Chapter 13 bankruptcy may be your best alternative if everything else fails. If you have a second mortgage that is not supported by equity, it may even be possible to remove your second mortgage (called a "lien strip"). A permanent loan modification which gives you better terms and a lower mortgage payment is of course good if you can get approved (The question is when and will you even be approved after months of waiting?) In some cases, you may be better off just walking away from your property. If you do, the question becomes whether you will have any liabilities even after foreclosure. Different circumstances require different solutions.

The point is: Don’t wait until the last minute to find out where you stand and please, do yourself a big favor: Don’t rely on advice given by your friends, family or your realtor who are not qualified to give you legal advice unless they are attorneys. See an attorney who is experienced in handling foreclosures so that you can prepare yourself in advance for whatever happens. Be especially concerned if your lender has initiated foreclosure proceedings by filing a Notice of Default because this means that you may have very limited time to protect your property.

Call Toll-Free 1(866) 477-7772 to schedule a free office consultation. We have offices in Glendale, Cerritos and West Covina.

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None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped over 4,000 clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1-866-477-7772.