When will this torrent of foreclosures stop? A recent Associated Press article predicts that 2011 will outpace 2010 for foreclosures. Maybe it is the 5 year adjustable rates finally coming due. Maybe it is the continued unemployment rates. Maybe it is the fact that home prices just are not where they were a few years ago. If your home value is 1/2 of what it was when you purchased the property just a short time ago, does it make sense to continue to try and fight?
Bankruptcy does provide one option. In Chapter 13, homeowners may have the ability to eliminate a second mortgage. However, this option, called "lienstripping," is only available where the value falls inside the amount of the first mortgage. For example, lienstripping may be available where a home valued at $500,000 has a first mortgage for $550,000 and a second for $200,000. Lienstripping would not be available in that same home with a first mortgage for $450,000 and a second for $250,000.
Luckily for us here in the San Jose area, prices appear to have stabilized. (See Graph)
Call the Henshaw Law Office today at (408) 599-1305 if you are facing foreclosure and want to discuss your options.
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