Court Ruling Could Affect Foreclosure Process for Atlanta Homeowners
Why should homeowners in Atlanta care about a foreclosure in Massachusetts?
Because a recent court ruling there could have a drastic impact on foreclosures in the future, affecting the entire U.S. banking industry - and millions of Americans currently at risk of losing their homes, say Atlanta bankruptcy attorneys. Last week the highest court in Massachusetts reversed foreclosures on two residences because the banks could not prove they held the mortgages at the time they seized the homes. Experts say the decision could set a precedence for increased consumer protection.
But that doesn't necessarily spell good news for homeowners facing foreclosure.
The issue stems from the tendency for banks to package home loans into securities, which are then sold to investors. Many banks have gotten lazy about properly documenting these transfers. So when it comes time to foreclose upon a homeowner who isn't paying the bills, they don't technically hold the mortgage. And without proof of ownership, it's not within their rights to foreclose.
On the one hand, overhauling the foreclosure process could mean a chance for at-risk homeowners to buy more time. On the other hand, it could ultimately make an already painful process even more painful. Some analysts are predicting foreclosure "do-overs," in which the bank has to buy back the loans it transferred, and then foreclose again on the same house. And as for those homeowners fortunate enough to win a lawsuit overturning a foreclosure? Unless their financial situations drastically change, they are going to be stuck yet again in a mortgage they can't afford to pay - but this time with legal fees leftover from their court battle.
But why drag out the inevitable when you could be working to prevent it in the first place? Chapter 13 bankruptcy addresses the root of the problem by eliminating debts, freeing up more money to make the mortgage payments. Meanwhile, the automatic stay enacted when you file for bankruptcy immediately puts a hold on foreclosure, protecting your home while you get your bills under control. If you're facing foreclosure, don't wait until it's too late. It's absolutely free to find out if bankruptcy is right for you when you sign up for a complimentary personal debt analysis with an Atlanta bankruptcy attorney.