What Does The Mortgage Meltdown Mean To Bankruptcy Clients?
By Carmen Dellutri, Attorney at Law on Aug 8, 2007 in General Bankruptcy Information
One of the most important questions that a Bankruptcy Client asks is: If I file Bankruptcy, will I ever be able to purchase a home? As a Bankruptcy Attorney, I strive to answer all of my clients questions as honestly and ethically as possible. The answer to this question is becoming elusive. Unless you have been living under a rock for the past six months, you know that the mortgage industry is in serious trouble. You also know that mortgage companies are either filing bankruptcy or going out of business everyday. American Home Mortgage is the latest on the chopping block.As it appears to me, there are still companies willing to write mortgages; however, there are no investors standing in line to purchase these mortgages. As of this writing, even people with great credit scores are having problems. So, if people with high credit scores are being scoffed at, what happens to the people with marginal credit scores, or, even worse a bankruptcy on their credit reports?
With mortgages being packaged and sold as asset backed securities on Wall Street, it used to be easy for mortgage companies to package and sell mortgages. Two years ago, the banks and mortgage brokers couldn’t write them fast enough. Investors were waiting in line to buy. Now, mortgage companies are looking for purchasers for these loans. So, my advice for my clients is simple. Don’t be in a rush to buy anything for a while, save your cash, and let the market settle down. When the time comes, you will know.
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