Back in 2009 during the mortgage meltdown, President Barack Obama instituted a program to slow down the flood of home foreclosures. The goal of the Home Affordable Modification Program (HAMP) was to offer incentives to banks and mortgage lenders who were willing to modify mortgages of homeowners who were on the verge of losing their homes.
Preventing a Housing Market Disaster
The idea behind the HAMP program was to fix what economists were calling a market failure. While borrowers whose homes were being foreclosed on would lose their homes, the banks were losing more money on foreclosed mortgages than if they negotiated new repayment terms for delinquent borrowers. It was believed that if a massive number of borrowers lost their homes to foreclosure, the overhaul housing market would suffer, not just the borrower and the bank. Foreclosed homes would drag down the value of the homes around them, which further depressed an already struggling housing market. And of course, this hurts everyone.
Stopping a Foreclosure
If you’re struggling to pay your mortgage and facing foreclosure, there are ways for you to possibly save your home. You could attempt to negotiate with your lender to modify your mortgage. If your lender is unwilling to modify your mortgage, the next step to consider is filing a Chapter 13 bankruptcy.
By filing for bankruptcy, you can often stop the foreclosure process as a repayment plan is worked out and approved by the Court that will allow you to pay your arrears over several years. Please note that you will still be required to make current payments on your mortgage while in the bankruptcy process.
Learn more about your options with foreclosures and bankruptcy from a lawyer who cares. Contact the Law Offices of Larry Karandreas for more information and a free consultation.
This blog is intended as a general discussion of legal issues and not as a statement of fact, legal advice or a legal opinion. No attorney-client relationship is created by this blog. Do not act or rely upon law-related information in this communication without seeking the advice of an attorney licensed to practice in the relevant area.