How Foreclosure Ruling Could Affect Chicago Homeowners

Two foreclosures in Massachusetts could have a big impact on banks - and homeowners - nationwide, say Chicago bankruptcy attorneys.

Last week a Massachusetts court voided the foreclosure of two homes, citing the fact that Wells Fargo and U.S. Bancorp could not prove they held the mortgages at the time they seized the residences. Last year, two other banking giants, Bank of America and JP Morgan Chase & Co., briefly stopped foreclosures because of similar documentation problems. If lawmakers get their way, banks are going to have to be a lot more careful about foreclosing on properties - and consumers may get better protection.

But homeowners facing foreclosure shouldn't breathe a sigh of relief just yet.

On the one hand, a slower foreclosure process could buy you a bit more time before the bank steps in and takes your house. On the other hand, it could just complicate what's already going to be a messy situation.

Do you really want to lose your home, then pay money to sue to get your home back - only to potentially lose it again later down the line? It's common today for banks to package mortgages into securities - problem is, banks have been too lazy to properly document the loan transfer. But ultimately, whether your bank can or can't prove they hold your mortgage doesn't matter. In the long run, if you aren't able to make your house payments, it's only a matter of time before you're not going to have a house to make payments on.

Fortunately, there's a way to prevent foreclosure while you rearrange your finances so that you can start making those payments again. When you file for Chapter 13 bankruptcy, an automatic stay stops the foreclosure process while you settle on a payment plan that will rid you of debt over the next several years. Find out if there's a bankruptcy plan that can keep you in your house and out of debt when you sign up for a free personal debt analysis with a Chicago bankruptcy attorney.

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