In February, The National Association of Realtors posted a report stating that the home sales index rose 3.5 percent, the highest level since July of 2015. Although Midwestern states such as Wisconsin are in the middle of winter, sales surged ahead of the traditional Spring buying season. Rising home costs, fewer homes for sale, and higher expectations from lenders, had many thinking that sales would decrease. However, the opposite may be true, as the February numbers suggest a stronger than expected launch into Spring.
Even the most optimistic of buyers can’t help to be a little cautious because in this fast-moving marketplace, things can change very quickly. It wasn’t that long ago that our nation experienced a major foreclosure crisis. Back in the early 2000’s, mortgage interest rates were very low. Buyers were able to borrow more money, and purchase bigger homes than what they would normally qualify for. Banks were largely basing their loans on the assumption that home prices would continue to rise. The assumptions were toxic and didn’t work as planned. Although most of the homes that were lost to foreclosure crisis were considered prime, the sub-prime borrowers did tend to default at a higher rate. Because the sub-prime loans were often sketchy, many experts blamed the crisis on sub-prime lending. However, other experts argue that a variety of stressful economic factors such as unemployment played a larger role. In any case, a crisis can happen at any time, to anyone, when particular conditions are present.
Foreclosure is the legal process whereby a bank or mortgage takes the real estate title, due to the homeowner’s failure to make mortgage payments. Although the foreclosure crisis may be over, and the market is showing some optimistic progression, hundreds of thousands of homeowners across the U.S. continue to find keeping up with mortgage payments a struggle. This is why our message is so important; if you are facing foreclosure, there are options available that could save your home.
Chapter 7, otherwise known as ‘liquidation bankruptcy,’ will allow you to eliminate a deficiency balance owed to your mortgage company, if your home is sold for less than the outstanding balance owed to the mortgage company. However, Chapter 7 will not provide the opportunity to catch up with over-due mortgage payments and will not provide the long-term protection that a Chapter 13 can.
Chapter 13 Bankruptcy
Rising interest rates and the fragile balance of our economy makes foreclosure a real threat. For many people, Chapter 13 bankruptcy can be a very powerful tool that stops foreclosure and saves your home. In fact, Chapter 13 is the driving force behind many bankruptcy petitions. Generally, Chapter 13 must be filed before the mortgage company sells your home, but as soon as you file Chapter 13, the “automatic stay” goes into effect. This stops the mortgage company from foreclosing on your home. For more information on how bankruptcy can stop foreclosure, get first-hand advice from a bankruptcy attorney. Contact Debt Advisors Law Offices directly for a free consultation, while time is still on your side. 414-755-2400.