As housing prices nationwide continue to decline, many people are wondering how many more will lose their homes to foreclosure. Many people in financial trouble, wait too long to seek the professional advice of a bankruptcy attorney prior to being served with a foreclosure. In many cases, people in distress wait until the day of the foreclosure sale to call the bankruptcy attorney and ask if they can file an emergency bankruptcy to stop the proceeding. In most cases it’s just too late. This last year, it was reported that over 20 million Americans were in default or in danger of being in default on their mortgage, making many experts wonder why the foreclosure rate for 2011 was a little over 1 million. Are the banks hanging on to the properties to protect the prices of the real estate market? Or is it the fact that oversaturation of the market would happen by flooding the nation with 20 million new foreclosures.
While filing bankruptcy is usually the best choice to stop foreclosure, in some cases it can be stopped outside of the bankruptcy court. Over the last 10 years, the lending institutions in the US have traded mortgage notes wildly causing a cluster of records that is almost impossible to track. Lately, there have been quite a few court cases with individuals contesting the foreclosure by making the bank prove ownership of the property. With the derivatives market being unregulated, many of these notes traveled around the world a couple times to different lending institutions and investors. In many cases, no one knows who really owns the property. In fact, this might be another reason for why banks are delaying the foreclosure process with many of the properties they are servicing the loans on. Going into court and taking a piece of property only to find out that they are in the wrong could cost them millions in damages and that’s not including the damage to their credibility.
When being faced with foreclosure, don’t fret, take the time and talk to a bankruptcy attorney about the situation. As long as it’s not a last-minute deal, there are probably a few options with one of them being filing bankruptcy. The last-place an individual should look for advice is from their creditors.