The Minnesota Homeownership Center and the Housing Preservation Project have developed a new fact sheet that outlines the recent changes to Chapter 13 bankruptcy allowing 2nd mortgages to be stripped off if they are wholly underwater.
Prior to a ruling in "Fisette v. Keller" (actually court documents, here, if you're interested) this summer, limitations in the Bankruptcy Code prevented a mortgage on a principal residence from being modified in a Chapter 13 bankruptcy. Now, various courts have held that when the amount of the first mortgage is more than the value of the property, the second and third mortgages - and any other junior mortgages - are no longer secured and the limitation on modification no longer applies. These underwater second and third mortgages can be treated as unsecured claims, similar to credit card debt, and stripped off (removed or cancelled) by a Chapter 13 plan.
The fact sheet defines when second mortgages may be "stripped off" - and when they can't.
The Center is continually developing and updating our fact sheets around foreclosure prevention and homebuyer services. Visit our website often for the most recent versions of these documents... they're free to download and distribute!
Showing posts with label Bankruptcy. Show all posts
Showing posts with label Bankruptcy. Show all posts
Thursday, November 3, 2011
Wednesday, December 16, 2009
Bankruptcy and Foreclosure Fact Sheet Now Available
The Minnesota Home Ownership Center, working with our partners at the Volunteer Lawyers Network and the Housing Preservation Project, has just released a new Fact Sheet with answers to frequently asked questions about the issue of bankruptcy and foreclosure.
The fact sheet, available here, answers such questions as:
These, and several other questions, are answered in the new fact sheet.
In addition... the Center is continuing to work on a fact sheet that answers questions about the complications that arise when homeowners declare bankruptcy but still need loan modifications. Stay tuned!
Did you know that the Center now has over a dozen Fact Sheets that can help struggling homeowners answer questions about their mortgage and foreclosure? A complete list of Fact Sheets is here.
The fact sheet, available here, answers such questions as:
- What happens to my mortgage in bankruptcy?
- What happens if I file for Chapter 13 bankruptcy, and default on my mortgage payments?
- Can I convert a Chapter 7 bankruptcy to a Chapter 13?
These, and several other questions, are answered in the new fact sheet.
In addition... the Center is continuing to work on a fact sheet that answers questions about the complications that arise when homeowners declare bankruptcy but still need loan modifications. Stay tuned!
Did you know that the Center now has over a dozen Fact Sheets that can help struggling homeowners answer questions about their mortgage and foreclosure? A complete list of Fact Sheets is here.
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