Homeowners Hurt by Flood of Foreclosures May Find Relief with Chicago Bankruptcy

With the $26 billion settlement between states and the country's largest lenders approved, a wave of foreclosures is predicted to wash over the market.

lots of homes.jpg

As a result, home values will likely continue falling, driving some underwater homeowners to file for Chapter 13 bankruptcy in Chicago.

Banks had been holding on to many delinquent properties since late 2010, according to CNN Money. That's when mortgage lenders began rethinking their foreclosure processes after falling under suspicion of robo-signing, a practice in which bank employees allegedly signed off on numerous foreclosure documents without proper verification.

While banks waited, some folks were able to continue living in their homes for months - or years - after they had stopped making mortgage payments.

On average, it now takes a bank 370 days to repossess a delinquent property. In some states, it takes even longer - for instance, Florida homeowners are in foreclosure limbo for an average of 861 days.

But though a stalled foreclosure may sound like a way for distressed homeowners to buy time, it's actually bad news.

Not surprisingly, many borrowers now suffer from years of damaged credit and limited savings that will translate into difficulty securing financing - or a rental property - once they're booted from their home.

Delayed foreclosures have affected all homeowners by keeping real estate prices artificially high. According to the article, new foreclosures could push already-low prices down by another 3.7 percent this year.

Optimistic market experts believe the flood will finally lead prices to bottom out and, eventually, encourage home buyers to take action.

Meanwhile, Chicago bankruptcy remains a valid option for the many homeowners hoping to avoid foreclosure and rebuild credit.

With banks poised to pursue foreclosures more aggressively, mortgage holders need a solution they can count on. Filing for bankruptcy has the power to stop foreclosure and allow consumers to restart their lives.

If you would like to speak with an experienced Chicago bankruptcy attorney, call the DebtStoppers Bankruptcy Law Firm at 800-440-7235. Contact us today for a free personal debt analysis.

More Blog Entries:

Chicago Bankruptcy Proves Valuable for Struggling Homeowners in City's Fragile Housing Market: April 13, 2012

Homeowners Struggling to Close Short Sales in Chicago May Want to Consider Bankruptcy: March 13, 2012

Additional Resources:

Flood of Foreclosures to Hit Housing Market, by Les Christie, CNN Money

Post a Comment

Your email is never published nor shared. Required fields are marked *