February 3, 2009
What is happening in Washington DC?
The Senate and House of Representatives are drafting legislation
that will allow individuals to REDUCE the principal balance
of their mortgage to the value of their home. This is also
known as a Mortgage cram down. It is highly likely that if
the Bill passes through Congress, President Obama will sign
immediately.
Who will benefit from this legislation?
Many of you who have purchased or refinanced your homes and
are negative in equity, aka upside-down, may qualify to reduce
the principal of your mortgage to the value of your home.
This law change will have the immediate effect of allowing
you to begin to create equity in your home. Further, many
of you who be unable to afford the mortgage currently,
may be able to restructure your mortgage making it affordable.
On the other hand, if you are still unable to afford the
mortgage, you will likely have the opportunity to sell the
property since the mortgage will be reduced to the property
value. Currently, many people cannot sell their home because
buyers are unwilling to pay what is required to satisfy the
total mortgage debt. Once, your mortgage principal has been
modified to a realistic value, buyers may begin bidding on
the property allowing you to sell.
To learn more about the legislation or obtain
more information about your situation, please complete the
Free Evaluation or call
716-573-4980.
February 3, 2009
Rep Frank: Homeowner Help To Be Joined With Mortgage Cram-Down
Bill
By Jessica Holzer
Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- A key U.S. House lawmaker said Tuesday
that a bill to revamp a program to help strapped borrowers
refinance into cheaper loans would likely move with legislation
to allow people to have their mortgage debts reduced by bankruptcy
judges.
House Financial Services Chairman Barney Frank, D-Mass., said
he expects the two measures to be joined before they go to
the House floor, though he did not speculate on when the vote
could occur.
While Frank supports the bankruptcy measure, he said Congress
ought to take steps to insure that homeowners don't fall into
bankruptcy.
"It does seem that we should be doing the most that
we can to present an alternative," he said in opening
remarks at a hearing on promoting lending and bank liquidity.
The bankruptcy legislation, which is fiercely opposed by
the banking industry, does not come under the jurisdiction
of Frank's committee. Sponsored by House Judiciary Chairman
John Conyers, D-Mich., it passed that panel last week.
After stalling in Congress last year, the bill has gained
traction in recent months with the shift in power in Washington
and mounting evidence that mortgage servicers have not done
enough to modify loans for troubled borrowers.
The banking industry is lobbying hard to have the legislation
narrowed in scope. Lobbyists argue that allowing the principal
balance of mortgage loans to be reduced by bankruptcy judges
- a move known as a cram-down - would cause mortgage rates
to soar for all other borrowers.
Frank, who noted Tuesday that he has been a supporter of
the bankruptcy bill, has not so far put his imprint on the
measure. Industry lobbyists speculate about whether his involvement
in negotiations would result in changes to limit the legislation's
impact.
On Wednesday, Frank will convene his committee to revamp
the Hope for Homeowners program and make permanent a temporary
increase in the Federal Deposit Insurance Corp. limit of $250,000.
Hope for Homeowners was created in October to allow certain
borrowers to refinance into more affordable loans backed by
the Federal Housing Administration.
The Congressional Budget Office predicted that the FHA would
have insured roughly 40,000 loans under the program by this
time. So far, it has not insured any.
-By Jessica Holzer, Dow Jones Newswires; 202-862-9228;
jessica.holzer@dowjones.com
October 2005 BAPCPA
The Bankruptcy Abuse and Consumer Protection
Act "BAPCPA" was enacted into law in October of
2005. This act made numerous changes to bankruptcy law resulting
in a belief among the general public that bankruptcy is not
an option any longer. This couldn't be farther from the truth.
BAPCPA has changed the bankruptcy process and rules in many
ways; however, bankruptcy exists and is a must for many individuals
in today's downward economy.
To learn more and speak to an experienced bankruptcy attorney,
complete the free evaluation or call Mr. Yehl at 716-573-4980.
Below is a list of some pertinent changes and documents needed
in order to file for bankruptcy:
1. CREDIT COUNSELING: Each debtor must undergo credit counseling
through an approved provider designated by the United States
Trustee for the District within which one files for bankruptcy
protection. Unfortunately, the providers charge a fee, typically
$50.00 or less, which makes filing more expensive. This requirement
is commonly referred to as "the ticket into bankruptcy."
2. FINANCIAL MANAGEMENT: After the bankruptcy is filed, each
debtor must undergo a financial management course, also known
as debtor education, through an approved provider designated
by the United States Trustee for the District within which
one files for bankruptcy protection. Again, there is a fee
for this service, typically $50.00 or less. This requirement
is commonly referred to as the "ticket out of bankruptcy."
The financial management course must be completed within a
specified time period, 45 days after the first scheduled 341a
meeting of creditors, in order for a debtor to receive a discharge.
3. PAYMENT ADVICES: Debtors are now required to provide 60
days of pay stubs or other form of income to file for bankruptcy.
The 60 days of pay stubs begin 60 days preceding the date
the case is filed and must be filed with the Court.
4. TAX RETURNS: Additionally, a debtor is required to either
file or provide the Trustee with a copy of the most recent
filed tax return. Some jurisdictions, require the most recent
two years of tax returns.
5. The "MEANS TEST": BAPCPA created a new form,
FORM 22, that must be completed and filed which incorporates
a debtor's gross income for the 6 months prior to the filing
date. The 6 month period ends on the last day of the month preceding
the date of filing for protection. The test utilizes
numerous IRS guidelines in an attempt to determine if any
abuse exists.
6. OTHER DOCUMENTS: Please note that additional documents
may be required prior to at the 341a meeting of creditors.
They include Real Estate Valuations, Mortgage pay-off statements,
copies of title to automobiles, to name a few. There may be
additional requirements depending on your jurisdiction and
local rules.
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