Grossbart on Bankruptcy Law

ATTORNEY GENERAL FORECLOSURE SETTLEMENT

Federal and State officials announced a settlement of more than $25 billion with five of the nation’s banks today concerning the banks’ defective and fraudulent foreclosure practices.  The settlement attempts, albeit in a limited manner, to help negatively affected borrowers by reducing the amount they owe on their mortgages, and/or lowering interest rates, and/or paying money to homeowners whose homes have already been lost to foreclosure.  Will this settlement help the troubled housing market in Maryland?  Maybe.  Given the failure of past government programs to help solve homeowners’ problems, most notably the Home Affordable Modification Program (HAMP) coupled with the banks’ past reliance on workers with minimal qualifications or work experience we will just have to wait and see just how effective or ineffective the results will be.  If you have a mortgage with one of the five banks currently signed on to the settlement you may call one of the following toll-free numbers:  Ally/GMAC 800-766-4622; Bank of America 877-488-7814; Citi 866-272-4749; JPMorgan Chase 866-372-6901; Wells Fargo: 800-2883212.Visit a new government website at http://www.nationalmortgagesettlement.com/. Maryland Attorney General Gansler is setting up a call center staffed by 10 people who can be reached at 888-743-0023.  Let’s hope that all 40,000 homeowners that Mr. Gansler estimates are eligible for the program do not call at the same time.  More about this settlement later in another blog as the program’s success and/or failure evolves.

 

Is President Obama's Making Home Affordable mortgage plan program working?

John Ciresi, vice president and portfolio manager for Bank of America in Towson, Md anticipates a rise in the foreclosure rate in 2010 because 60 percent of loan modifications have failed and went into foreclosure. He indicates this is due to a combination of property devaluation and people losing their jobs. He further asserts that Bank of America is getting 40,000 new offers a month on short sales. I believe the famous line from the movie Jaws is appropriate for our rising housing problem, "I think we are going to need a bigger boat". Hold onto your hats!

Bankruptcy or Debt Management?

People who are looking to resolve their inability to manage their debt are typically presented 2 options - bankruptcy or debt management. No one wants to file bankruptcy. It is the last solution. In the last several years particularly after the new bankruptcy law was enacted, debt management companies promoted themselves as the "alternative" to

bankruptcy. Their selling point is that it is "not" bankruptcy but are silent on its impact on your credit report. Fact - it does have a negative impact on your credit report. Further you should ask what percentage of their "customers" (remember it's a business) are successful in reducing their debt permanently. Ask what happens if even one creditor does not agree with they are promoting? Further, what you don't receive from a debt management company is a "discharge" order. A discharge is a court order that discharges your dischargeable debt permanently.