GOOD NEWS FOR HOMEOWNERS: Help may be right in your own files. Truth-in-Lending Laws can bring new hope to homeowners with payments exploding out of reach. (more)

DOES BANKRUPTCY PREVENT FORECLOSURE? Bankruptcy should be used as the "Insurance Policy" backing up the more practical, direct lender intervention prior to court involvement. (more)

WHY SHOULD YOUR LENDER WANT TO HELP US HELP YOU? Because HUD says they could be liable for TRIPLE DAMAGES if they do not.  (more)
James T. King, Esq.
LAW OFFICES OF KING & ASSOCIATES

(Interview with Consumer Protection and Foreclosure Prevention Advocate, Certified Bankruptcy Specialist, and author of “How to Write a Chapter 13 Plan under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005”.)

QUESTION: Mr. King, you have been saving homes for over 25 years. What are the most important things a homeowner should know about their rights in foreclosure?

MR. KING: “Bottom Line? When the bank starts foreclosure proceedings, they are not just trying to collect payments; they fully intend to physically remove you from your home within a very short time. The credit and financial problem you have in foreclosure will make it much harder to put a new roof over your head, than it is to fight to keep the home you are in. Even if you think you can’t afford the current payments, you can possibly restructure the loan affordably, or get time to sell at a decent price, or even for less than you owe. You do not have to be tempted by the vulture buyers who are trying to make a quick buck from your hardship. And if you have an emergency, a court filing will stop the foreclosure DEAD in its tracks. You do have options and power, no matter what the lender is telling you.

QUESTION: As a renowned expert in the area of Chapter 13 bankruptcy, what is the most effective tool you recommend for actually avoiding foreclosure without the use of the court system?

MR. KING: “Chapter 13 used to be one of the only affordable options, with negotiations for “hardship consideration” costing $5,000 nd upwards because of the sheer labor involved on the part of the attorney. Today, we use an affordable, streamlined hardship and loan modification system, which can restore affordable payments without the use of the court system. This program can tune up the foreclosure situation and secure the family home prior to any filing, or potentially simplify the filing into a Chapter 7, with a much quicker fresh start for the benefit of the clients.”

“You will probably have one hardship during the entire length of your 30 year mortgage. You owe it to yourself to use the hardship program option first, before you complicating things in the court system. Chapter 13 remains a powerful back-up plan to “pause” a foreclosure and force creditors to accept a repayment plan, but there is a big price to pay.”

The Foreclosure Education Center offers a FREE Case Analysis on hardship qualifications to both homeowners directly, and homeowners’ attorneys. CLICK HERE or call TOLL FREE 800-844-1513.

QUESTION: How did you first discover “hardship programs” as a practical alternative for use by attorneys?

MR. KING: “I have always done an in-depth analysis for each client, and advised that if there is any option short of filing bankruptcy, they should exercise that option before they take the step into court. We look first at the existing lender. Today, given predatory lending issues and exploding ARMs (Adjustable Rate Mortgages), oftentimes, the loan is the hardship. The programs we use exist within nearly every loan in some form, and the lenders are under such scrutiny for loan fraud these days, they really don’t want a lawyer digging into their files. It’s just a matter of having years of industry knowledge, the ability to issue proper, legally-formatted, attorney-backed requests, and know what to do with the subsequent information, to get solutions to fall in place at the lender. “

“The real owner of the loan - the “investor” - does not want a loss. They want you to keep your home and keep making those payments. The lender taking your payments, however, is the “gatekeeper” to those programs, and it is often up to an attorney to “motivate” them to help you, as a priority above the other thousands of foreclosure files now piling up on their desks. You have the right to a good faith hearing on your state of recovery, and ability to keep your home. An attorney can see that your rights are respected. “

“We have simply streamlined the entry system to offer the benefits affordably to the general population. A homeowner using our system now has the same quality representation which costs big corporate clients many thousands of dollars, for a low fixed fee. I recommend this as a starting point for a person in foreclosure, and for attorneys seeking alternatives for their clients, as a practical and affordable option.“

For a FREE Case Analysis on all available options in foreclosure, please CLICK HERE or call TOLL FREE 800-844-1513.

QUESTION: Is a hardship program less expensive than a bankruptcy?

MR. KING: “In a word; yes. In a Chapter 13, besides the obvious loss of credit standing, the stigma of filing bankruptcy, the invasion of the courts into your personal financial affairs, there is the high cost of the filing itself, the additional attorney fees, court costs, time lost from work and the Chapter 13 Trustee’s fees which can be as high as 11% of your monthly payment. A person with $10,000 in overdue payments and late fees, with a $4,000 attorney fee in the plan, will pay plan payments of appx. $431 a month in addition to their mortgage payment… before we add in payments to other overdue creditors, all of which have to be disclosed and treated fairly in a court filing.“

“Our office has always been very careful to pre-screen our bankruptcy clients with many things in mind. Long-term ability to make those payments is the most important factor. But if you look at the court system as a whole, the truth is, most Chapter 13’s fall out of court after the attorney fees have been paid, and people find they’ve paid very little toward their mortgage. All in all, I’d say Chapter 13 is a very expensive alternative. A hardship program can tune up the foreclosure situation and secure the family home prior to any filing, or potentially simplify the filing into a Chapter 7, with a much quicker, cheaper fresh start for the benefit of the clients.“

We are happy to offer a FREE Case Analysis on hardship qualifications to both homeowners directly, and homeowners’ attorneys. Please CLICK HERE or call TOLL FREE 800-844-1513.

QUESTION: Is a hardship program easier to qualify for than a Chapter 13 bankruptcy?

MR. KING: “In many ways… yes! A hardship program often reduces payments, or restores the original payment, so that a person only has to show income to qualify for this lower payment. A Chapter 13 will create higher payments in all cases, and a client has to show the income to qualify for this.“

QUESTION: What happens if a person files a Chapter 13 in a panic, then can’t qualify or can’t afford the higher Chapter 13 payments, and gets thrown out of court? Can they still apply for a hardship program?

MR. KING: “Yes, and no. People need to take emergency action when their home is in danger, and many times they panic and file bankruptcy before they have completely recovered. Many investors are actually allowing loan modifications to be approved while in bankruptcy, subject to dismissal of the bankruptcy.“

“So, technically you can always “apply” for a loan modification. But if you want the best chance of approved you will start when you have your best chance for success. We want to show that as soon as it was humanly possible you began saving payments again, and did everything in your power to save your home. That doesn’t mean waiting until you have no other option and even the courts have given up on you! Unless there are extenuating circumstances, we may recommend rejecting a case for a client who appears to have shown bad faith, as the chances for success are greatly reduced.“

If you have recovered from your hardship, call us sooner, rather than later, so that we can arrange the best possible outcome for your situation. For a FREE Case Analysis on all available options in foreclosure, including “hardship” programs, legal options, short sales, reduced payments and loan modifications, please CLICK HERE or call TOLL FREE 800-844-1513.