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Options to Deal
with Foreclosure
The
recent economic downturn has caused many to financially suffer
in ways they never previously imagined. The strain from agonizing
over such troubles often takes a toll on other aspects of
one’s life. The Christopher Legal Group combines experienced
counsel with personal service to provide innovative solutions
to guide you through your financial crisis. Despite what you
may feel, there are alternatives that can ease the burdens
and help you get back in control.
Bankruptcy
Bankruptcy
may provide relief depending on your situation and desires.
For example, if you are facing foreclosure on one or more
properties which you do not want to keep, a Chapter 7 Bankruptcy
(if you qualify) may allow you to surrender the property and
extinguish all obligations associated with the loans that
secured the property. In addition, you may also be able to
discharge other debts such as credit cards, medical bills,
judgments, car loans (if you surrender the vehicle), taxes
(in some situations), HOA dues, nd many other types of obligations.
You may also be able to keep your home in a Chapter 7 Bankruptcy,
provided you are current on your mortgage payments.
If
you are behind on your mortgage payments and desire to keep
your home, a Chapter 13 Bankruptcy may work for you. A Chapter
13 Bankruptcy may also be recommended in other situations.
There are various factors to consider if a Chapter 13 Bankruptcy
is right for you. Please contact the Christopher Legal Group
to arrange a consultation to find out if Bankruptcy is right
for you.
Deeds-in-Lieu
of Foreclosure
A
Deed-in-Lieu of Foreclosure (“DIL”) allows a property
owner to give a property back to a lender in full satisfaction
of the obligations owed to the lender. This is not an automatic
right afforded to a borrower. There may also be unintended
tax consequences associated with a DIL. Depending on a particular
situation, there are measures we take that may help mitigate
or extinguish the potential tax issues and convince (or pressure)
a lender that a DIL is in its best interest. It is common
(but not necessarily an absolute requirement) for a lender
to require a property to be listed for sale for a stated period
of time before it will entertain a DIL request.
Short
Sales
A
Short Sale is when a property is sold for less than what is
owed to the mortgage holder(s) and other obligations (such
as back property taxes, HOA dues, assessments, …). The
lender(s) will consider the offer for the property and the
financial condition of the borrower when deciding to approve
a Short Sale. Typically, we request that the lender(s) approve
the Short Sale and waive any deficiency claims against the
borrower. Otherwise, we remind the lender(s) of the very real
threat to file Bankruptcy to ensure that any such potential
deficiency is extinguished as part of the Bankruptcy. Further,
in this scenario, the Bankruptcy filing by the borrower will
delay the time for the lender(s) to get the property “off
their books”, thus giving an incentive for the ender
to approve our Short Sale proposal.
As
part of the services we provide for DIL and Short Sale proposals,
we will prepare a hardship package. This proposal includes,
among other things:
•
an explanation, with supporting documents, of the reasons
the borrower can no longer afford the property;
• supporting documentation of the borrower’s
income and financial condition;
• completion of any forms required by the respective
lender(s);
• appraisal or Broker’s Price Opinion (“BPO”)
of the property (if determined to be helpful for our client’s
position);
• preliminary title report (if determined as beneficial
for our client’s position); and
• legal reasons why it is in the best interest of
the lender(s) to accept the DIL or Short Sale proposal.
Like with a DIL,
there may be unintended tax consequences associated with a
Short Sale, and we provide services that my help reduce the
risks associated with such tax issues.
Overall,
our strategy with our DIL and Short Sale services is to give
the lender a reason to accept our proposal as being in its
best interest. Further, in the event that the lender does
not accept the proposal, our services are aimed at establishing
certain defenses to protect (or reduce) the potential liability
that may arise from any deficiency stemming from the foreclosure.
Loan
Modifications
For
borrowers who do not (or can not) file Bankruptcy, yet want
to keep their homes, we also assist with negotiating loan
modification agreements.
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