Chicago Bankruptcy Lawyers note Government Moves to End Failed Foreclosure Assistance Program
Congress is moving to end the government's failed mortgage modification program, once again leaving Chicago homeowners facing foreclosure to fend for themselves.
Our Chicago bankruptcy attorneys continue to assist clients struggling with mortgage debt to determine the best course of action. The Home Affordable Modification Program was an abysmal failure largely because banks refused to cooperate -- ultimately only about $1 billion of the $50 billion earmarked for homeowners was distributed.
In many cases, the process turned out to be a nightmare for homeowners who were already struggling to stay afloat financially. Mortgage modifications were approved on a temporary basis, then later rejected for permanent modification. Often, the banks used the resulting mortgage arrears to file foreclosure actions. In other cases, lenders approved a modification and then sold the loan to a bank that would not honor the agreement.
In all cases, consulting a Chicago law firm experienced in handling foreclosures and bankruptcies is the best course of action to protect your rights and the future financial well-being of you and your family.
The New York Times reports House Republicans have voted to kill the program. Democrats may try to save it, but even they admit it has been a failure. Banks have done everything possible to avoid helping homeowners, including losing paperwork and denying many who were eligible according to the guidelines. A review of the program by the government determined banks could only be punished for handing out too much help -- which has been anything but the problem.
Meanwhile, housing prices have fallen for six consecutive months -- very near the technical definition of a double dip recession. Many outlets are reporting the next shoe to fall will be deficiency judgments. Homeowners who avoided bankruptcy via strategic default, foreclosure or shortsale, could be on the hook to the bank for as long as 10 years and may be chased for the difference between what was owed on the mortgage and what the property brought at foreclosure sale.
In other words, they may have gone through the pain and stress only to face bankruptcy anyway -- instead of tackling it all at once and putting their financial issues behind them through a Chapter 7 bankruptcy filing.
RealtyTrac reports there were 225,000 foreclosure filings in February, a number that could outpace even the height of the recession. Until the market regains stability, home prices will continue to fall, and the number of struggling homeowners seeking a new beginning through bankruptcy protection in Illinois will continue to climb.
If you need to speak to a Chicago bankruptcy attorney call the DebtStoppers Bankruptcy Law Firm at 800-440-7235 today for a free debt analysis. Call 800-440-7235.