California has recently enacted landmark legislation that intends to end many lender abuses in the forelcosure process.  This legislation is generally referred to as the Homeowner Bill of Rights.  Among other things, this legislation may give homeowners the right to sue their lender for failing to adhere to certain standards of fairness in dealing with borrowers who are behind on their payments.  The legislation also intends to end "dual tracking" - the confusing, all-too-common situation where the lender is discussing modification with the borrower, but simultaneously pursuing foreclosure.  Many borrowers have lost their homes while they thought they were being reviewed for a modification.

It remains to be seen how this legislation, which takes effect in 2013, will effect homeowners.  Will lenders be less aggressive about foreclosures?  Or could it have the opposite effect that it was intended to, and result in lenders refusing to consider borrowers for loan modifications so they can put them on the "single track" to foreclosure?  

Luckily, the Bankruptcy Code already provides many options to stop a foreclosure immediately, even if you are applying for a loan modification.  In addition, bankruptcy allows you to strip equity lines and second mortgages when the house is worth less than the balance of the first mortgage.  These powerful features of the Bankruptcy Code, in conjunction with the Homeowner Bill of Rights, put consumers on much firmer ground than they were on at the beginning of the housing crisis.  Have questions about using bankruptcy to stop or delay a foreclosure, while wiping out other debts that make the mortgage payment unaffordable?  Contact us for a free consultation.

The nation's biggest mortgage companies reached a $25 billion settlement in February with state officials regarding their wrongful practices and disregard of homeowner rights.  Unfortunately for homeowners, this settlement cleared the way for banks to address their backlog of foreclosures - particularly foreclosures the banks had repeatedly postponed or delayed initiating.

Lenders initiated foreclosure on 12% of the loans behind in payment in June — the highest level since the first half of 2009.  Analysts have been expecting an increase in foreclosures - particularly foreclosures on homes that have been in default for quite some time.  RealtyTrac estimates 700,000 homes will be foreclosed by lenders this year.

Fortunately, the bankruptcy process allows individuals and families more time to try to save their homes by automatically staying a foreclosure upon the filing of most bankruptcies.  While the foreclosure process is stayed, you can continue to work to obtain a loan modification through your lender yourself or with the assistance of an approved counselor.  If addition, you can also propose a plan to the court to reinstate your mortgage by paying the past due amounts over time.

If you are in danger of foreclosure, contact us today online or call us at 650.259.9200 to set up a free bankruptcy consultation.  We can explain how you can use the bankruptcy process to wipe out unsecured debts, freeing up funds so you can afford your mortgage and car payments.  We offer flexible payment plans and competitive rates to make our services very affordable to you. -honakerlegal