Foreclosure Freeze Reported To Harm Security Clearance

22 Oct Foreclosure Freeze Reported To Harm Security Clearance

Foreclosures have been frozen as lenders are purportedly investigating problems with mortgage documents. I wrote an article last week Foreclosures Stopped by Bank of America: Not Always Good News outlining some of the problems that people may run into with the freeze. In an article in the Washington Post Foreclosure freeze could put security clearances at risk , the writers Dina ElBoghdady and Dana Hedgpeth examine how security clearances may be affected by borrowers put into financial limbo by a foreclosure freeze on their property.

Some people think that problems with mortgage documents will lead to someone saying that the mortgage will be canceled and they will own their home free and clear. It is highly unlikely that this will happen, and certainly impossible that it will happen to everyone whose mortgage documents are suspect. More likely is that people will get further and further behind on payments and eventually lose their home if they can’t catch up, negotiate a modification, or file for bankruptcy.

Straightening out the mortgage documentation iss about requiring the mortgage lenders to follow the law, but borrowers also have debts to repay that need to be dealt with. Ultimately if borrowers are behind, what they want is a solution to help them keep their home and they want to be treated fairly. Figuring out who owns the notes so homeowners know who to negotiate with would help a lot. Holding mortgage lenders to proving the accuracy of their accounts is critical.

The more homes that are foreclosed upon, the lower everyone’s property values drop. Buyers are afraid to buy because the market isn’t stable. People have lost their life savings in any home equity they used to have. Homeowners are living in homes that are worth thousands upon thousands of dollars less than what they owe. Owners with negative equity are in a position where they can’t sell the house if they wanted or needed to do so. Modification of mortgages to reset the terms, lower interest rates and putting homeowners back on track would do a lot to slow down the foreclosure spiral.

Unfortunately, the freeze won’t solve this mess, and is hurting some borrowers while providing a temporary reprieve for others.

see also:

Chapter 13 bankruptcy is the type of bankruptcy most people look to to help them stop foreclosures and cure their mortgage through monthly court payments. Doug Jacobs wrote a good article describing this in Mortgage and Bankruptcy: Save Your Home!

Published: October 20, 2010
Courts are expected to be flooded with cases against lenders trying to foreclose without proper records.
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Concentrating in Consumer Bankruptcy Law since 1988; Wake Forest Law School JD 1987 Law Office of Susanne M. Robicsek since 1993, Law Clerk to Judge Rufus Reynolds, US Bankruptcy Judge for Middle District of NC; Burns Price & Arneke, PA, David Badger and Associates, PA.

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