Mortgage Delinquincies Expected to Rise - Don’t Wait if You are Falling Behind
By Jonathan Ginsberg, Atlanta Bankruptcy Attorney on Feb 10, 2007 in Chapter 13 Bankruptcy, Mortgages
HSBC Holdings, one of the nation’s largest sub-prime mortgage lenders, expects to see increased mortgage delinquencies and slowing house price growth in 2007. Because house valuations will not increase, homeowners with adjustable rate mortgages will have less opportunity to refinance. HSBC’s news release was contained in federally required reports issued to stockholders. Because public companies like HSBC can be sued for misrepresentation, this type of news release is likely to contain accurate and trustworthy information.
What does this mean to you? If you have an adjustable rate mortgage, you may want to consider refinancing sooner rather than later into a fixed rate mortgage. Adjustable rate mortgages can be dangerous in that your mortgage payment may jump several hundred dollars without warning if interest rates change.
If you are struggling financially and see more of the same for the near future, now may be a good time to consider every option, including downsizing to a smaller home. A great many Chapter 13 cases arise from mortgage delinquencies and pending foreclosures. Often homeowners file Chapter 13 to save a house they cannot afford. However, when the crisis of a foreclosure looms, there is no time to search for replacement housing or to calmly evaluate other options.
HSBC’s report to its stockholders suggests that pressure on homeowners in middle class families will remain high. At the same time, middle class families - those with household income in the $60,000 to $90,000 range, do not fit easily into Chapter 13. If you fit into this income range and you are having trouble meeting your budget every month, now is the time to speak with a bankruptcy lawyer while you still have options.
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