Home-ownership is part of the American dream and something that many people aspire to achieve. Once they do have a home, most people pour their heart and soul into it while creating years of memories. We understand that facing foreclosure is an extremely difficult situation, but we also encourage homeowners who are facing foreclosure to address the situation as early in the process as possible. Taking timely action will ensure that potential options are not foreclosed through the passage of time alone.
The mortgage foreclosure attorneys of Sadek & Cooper are proud to fight for homeowners and their families in Philadelphia, southeastern Pennsylvania, and in southern New Jersey. We can inform you of potential legal options to protect your home from a mortgage foreclosure. In this blog post, we will set forth some of the general legal strategies we may recommend based on the particular situation an individual faces. However, every situation is different and can therefore only be assessed following a careful review of the matter. To schedule a confidential consultation with the foreclosure defense attorneys of Sadek & Cooper call 1-800-689-1649 today.
Mortgage Modification Can Be an Option Early in the Process
For individuals who have fallen behind on their mortgage but who have not yet entered into the foreclosure process, mortgage modification may be an option. Mortgage modifications must be crafted to meet the demands of the situation but potential modifications could include:
- Interest rate reduction
- Extended repayment term
- Reallocation arrears, interest, and delinquent taxes to the principle
In other cases, a mortgage modification may occur as part of a Chapter 7 bankruptcy or Chapter 13 bankruptcy. For an experienced attorney, a mortgage modification negotiation is often a flexible tool to address a foreclosure or potential foreclosure situation.
As an alternative to a mortgage modification, the lender may also consider a pre-foreclosure forbearance plan. If the lender agrees, a sale of the property is postponed in exchange for a promise of repayment over a short amount of time. When the lender is amenable to a pre-foreclosure forbearance plan, up to an additional six months to catch-up on arrearages is typically available. However, due to the relatively short repayment window and need to make both current and past payments, this option can be difficult to satisfy unless the individual has experienced a recent windfall or has otherwise been able to significantly increase income or decrease expenses.
Chapter 13 Bankruptcy to Stop a Mortgage Foreclosure
While people are generally more familiar with Chapter 7 bankruptcy, Chapter 13 is often a more effective option when facing a mortgage foreclosure. Typically, a person wishes to protect their home not only because of their sentimental attachment but also because of the equity that they have built. Protecting this equity or high relative income levels are two of the more common reasons why people file for Chapter 13 bankruptcy.
Individuals who file for Chapter 13 bankruptcy will, upon the court’s approval, enter into a three to five year repayment plan. This three to five year plan can lower the Chapter 13 filer’s expenses by permitting the filer to repay credit card bills, medical expenses, and other debts not secured by property at a significant discount. The three to five year repayment plan also allows the filer to have more time to pay and catch up on mortgage arrears.
A Short Sale Can Mitigate the Impact of a Foreclosure
In some situations, the costs of saving the home may be prohibitive. However, you may still wish to mitigate the financial impact you face and avoid foreclosure. In some situations, a short sale — where a home is sold for less than the mortgage value – can be a, option to address the situation. That is, a person who agrees to sell their home for $175,000 on a $200,000 mortgage is attempting to engage in a short sale. However, all short sales are subject to the approval of the lender.
Work with a Strategic Philadelphia Bankruptcy Lawyer to Stop Home Foreclosure
A Philadelphia bankruptcy attorney of Sadek & Cooper can fight for homeowners in Pennsylvania and New Jersey. To schedule a confidential legal consultation to discuss how you can stop foreclosure and save your home please call our firm at 215-995-2543 today.