tag:blogger.com,1999:blog-44939215548464017612012-02-02T13:38:09.947-08:00bankruptcy help adviceJohn E. Mufson Esq.http://www.blogger.com/profile/15594030076255511429noreply@blogger.comBlogger11100tag:blogger.com,1999:blog-4493921554846401761.post-14997564140168940742012-01-16T13:26:00.000-08:002012-01-16T13:30:37.309-08:00The Strategic ForeclosureMillions of homeowners in Florida now own a primary residence with negative equity. <br />Many owners have two mortgages and the combined balances on them are so great,that<br />it will take as long as 20 years to realize positive equity in the property.Thus, the owner must<br />explore all options with respect to the debt. Important consideration should be given to situations<br />where either the owner will need to relocate or retire in five years. Continued payment of the first and second mortgages for a period of three to five years still will not allow the owner to complete<br />a conventional sale.<br /><br />As wages and retirement plans are not growing at anticipated rates,an owner should strongly<br />consider a strategic foreclosure. Thus ,while the owner can afford the mortgage payments, he or she will have to attempt a "short sale" to sell the property if required to relocate. By choosing not to pay mortgage payments, a owner may be able to save money to relocate and in some cases pay "cash" for another property, thus enjoying substantial costs in the ownership of a home.<br /><br />Two obvious questions arise, first the issue of liability of the owner on the mortgages and second,<br />the affect on the owner's credit score.In Florida,most foreclosures of a first mortgage are "in rem",<br />meaning that the lender will not pursue a monetary judgment against the owner and will proceed<br />only to take back ownership of the property.<br /><br />If there is a second mortgage,most likely the lender will accept settlement from the owner at a deep discount form the balance owed, sometimes as highas 90% off the balance.While the owner's credit score will drop, he or she will still have use of all their credit cards, however there may reductions in the credit limits.<br /><br />A viable option is the filing of either a Chapter 7 or Chapter 13 bankruptcy which will delay<br />the foreclosure process. In a chapter 13, which usually involves a 60 month payment plan of debt, the owner in some instances may "strip" a second mortgage, whereby at the end of the 60 months, only the first mortgage remains as a lien on owner's property. In either Bankruptcies,the owner will have to include all credit card and other unsecured debts.<br /><br />A strategic foreclosure alone or in combination with filing bankruptcy may be a solution.<br />Please contact the law office of John E. Mufson at 561-272-1003 for all other questions. <br /><div style="text-align: justify;"> </div><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/4493921554846401761-1499756414016894074?l=bankruptcyhelpadvice.blogspot.com' alt='' /></div>John E. Mufson Esq.http://www.blogger.com/profile/15594030076255511429noreply@blogger.com0