Tennessee Bankruptcy May Help Homeowners Hit by Second Wave of Foreclosures

It looks like a recent drop in Tennessee foreclosures was just a brief calm before the storm, according to The Tennessean.

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In 2011, approximately 11 percent of Nashville area home sales were related to foreclosures - a one-third decrease from the previous year. Now the number is expected to rise to as high as 15 percent.

Though it's still lower than the foreclosure rate at the peak of the mortgage bust, the prolonged downward pressure on prices is sure to have a negative effect on consumer confidence, which is an important factor in economic recovery.

Foreclosures were put on hold in recent months as banks were forced to sort through the mess they created by allowing forged and robo-signed documents. Now that the $26 billion mortgage settlement has been announced, lenders are getting back to business.

With 864 bank-owned properties in 2011, the Nashville metropolitan area already has one of the highest rates of mortgage defaults, auctions and bank-owned sales in the Southeast.

The worst-hit neighborhoods are newer communities built during the height of the housing bubble and sold to buyers taking out no-money-down mortgages. By late last year, nearly 15 percent of all properties in the region were underwater, meaning homeowners owed more on their mortgages than their homes are worth.

Many homeowners were given a false sense of hope as foreclosures slowed and homes began to appreciate very slowly. Now, it looks like it will be a little longer before equity can be regained.

Homeowners fortunate enough to be able to stay current on mortgage payments won't really suffer any consequences unless they sell their homes. Unfortunately, many folks can't afford to stay and make payments on expensive mortgages.

Many homeowners have found relief through Tennessee bankruptcy. Filing for Chapter 13 bankruptcy has the ability eliminate nagging credit card debt, freeing up more money for the mortgage. In some cases, mortgages and home equity loans can be eliminated completely.

Once the Tennessee foreclosure process has begun, it can go quickly, according to the Tennessean. But bankruptcy can work quickly, too. Our Tennessee bankruptcy attorneys have stopped foreclosures from occurring just hours before homes were scheduled to be sold at auction.

There's no telling when the housing market is going to recover. But with bankruptcy, we can help your finances recover today.

If you would like to get in touch with a Tennessee bankruptcy attorney call the DebtStoppers Bankruptcy Law Firm at 800-440-7235 today for a free debt analysis. Call 800-440-7235.

More Blog Entries:

Banks Cite Moral Reasons for Refusing to Help Homeowners with Underwater Mortgages in Tennessee: March 2, 2012

Tennessee Bankruptcy Filing Can Stop Foreclosure, Even After Serious Mortgage Mishaps: January 2, 2012

Additional Resources:

Foreclosures Expected to Soar, by Bobby Allyn, The Tennessean

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