The Coming Foreclosure Crisis

01 May The Coming Foreclosure Crisis

We are already reading horrible foreclosure statistics. It will get worse, predicts Christopher Cagan, director of research and analytics for First American CoreLogic as reported at Bankrate.com. Adjustable rate mortgages issued between 2004 and 2006 will have their interest rates reset, with many mortgage payments doubling, causing a one-in-three chance of losing the home.

If you have a recent adjustable rate mortgage, there is a strong likelihood that you have no equity and the new payments will not be affordable. The absence of equity may be true even with a recently obtained fixed mortgage. Proceed with caution in attempting to save your home through a Chapter 13 filing. You may be better off surrendering the home, filing for Chapter 7 protection from any mortgage deficiency (and other debts), renting for far lower monthly payments and saving for a real down payment in two years when you can get a new mortgage.

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L. Jed Berliner practices exclusively in consumer bankruptcy, foreclosure defense, and related consumer protection litigation such as credit card defenses and suing debt collectors. He established his Springfield, MA practice in 1988. Attorney Berliner is a regular and active contributor to the Bankruptcy Law Network, the Bankruptcy Roundtable, and the National Association of Consumer Bankruptcy Attorneys, three specialized consumer bankruptcy forums on the Internet, and is an informal mentor to regional practitioners. He is recognized by his peers as an expert in consumer bankruptcy issues. He thoroughly enjoys being rated "excellent" in his client surveys.

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