Are consumer homeowners still looking for Mortgage Modifications? And, are they able to get them?
Well, it depends! As a lawyer in the business of practicing U.S. Bankruptcy law, State foreclosure law, and debt collection for over 30 years this seems like a usual and normal response. Legal colleagues would agree.
Compared to the number of homes underwater, in foreclosure or subject to loss during 2009 – 2015 the current trend is not nearly as spectacular. Also, the number of bankruptcy filings across the nation has dived downward to a major low.
Most of the foreclosed or repossessed real property was bought up by investors. They are renting the properties at lofty rates, making huge profits, selling at substantial amounts, and in some cases holding the paper. There’s a good possibility that the less-than-credit-worthy debtors will default. This provides an even greater boon for the investor who can repossess the real property, sell or rent it again, and obtain a judgment. The judgment can be collected with interest, costs and attorney fees tacked on. Or, it can be sold off to a collection company. A no muss, no fuss result.
Debt collection on behalf of investors, creditors, servicers and the like is at an all-time high. The debts being collected are an asset to the companies, increasing their bottom line. Student loan debt is especially superb.
The effect on the consumer is not so stellar. Consumers are borrowing money on credit cards, taking out all types loans, and robbing Peter to pay Paul. Credit reports are trashed, and collection agencies are chomping at the bit to scare consumers into paying something…anything to toll the statute of limitations. Some collections firms are buying unenforceable debt, suing the consumers. When consumers fail to respond, the collector/investor gets a judgment, and invokes collection devices such garnishment or levy on the consumers’ personal property.
Ah, the joy of debt collection when your adversary doesn’t know the law, rules or regulations.
Some consumers get wise and engage a competent attorney. Notice, I use the word “competent”. There are many lawyers in these United States, over one million. Many handle family, criminal, personal injury law. In my many years of practicing in the U.S. Bankruptcy Courts and handling debt collection on both sides, I’ve seen some of the most botched up cases by those lawyers who think that debt collection practice is a piece-of-cake.
Some consumers bypass the societal stigma of filing a bankruptcy petition. Chapter 13 is a great device for restructuring debt, stopping illegal collection activities and other forms of redress. A consumer can convert to a Chapter 7 and abolish all dischargeable debts. No wonder fake news, opinion press wants to set up a social stigmata for the unwary consumer.
Hey consumer. Wake up and smell the roses. Heck, if the current president of the United States can file numerous bankruptcies, and make millions, why not you?
