http://www.nytimes.com/2012/05/08/business/bank-of-america-starts-mortgage-reduction-effort.html

An Article in the New York Times talks about how “Bank of America has started sending letters to thousands of homeowners in the United States, offering to forgive a portion of the principal balance on their mortgages by an average of $150,000 each.”

The big questions are who got these letters and what are the qualifications? Is this going to be handled the same way the loan modification process has been handled?

Understaffed, lost documents, different person assigned to your case every 2 – 3 weeks. Sounds like another sick joke that will leave a lot of people with false hope.

If you are tired of the run around with loan modifications and false promises we can help surrender your underwater property back to the bank or file a chapter 11 or chapter 13 reorganization that can spread your back mortgage out over 5-25 years.

Most people don’t know about chapter 11 bankruptcy and how it can be used to save a homestead property.Chapter 11 allows a homeowner the ability to stop a foreclosure and reorginizes debts or mortgage. It will allow you to pay you regular mortgage payment each month and spread the mortgage arrearages (back payments) out over the remain years of your loan. So when you have been lead astray for 2-3 years and there is no way you can pay the back payments in a chapter 13 over a 5 year period a chapter 11 allows you to spread the payments out over the remaining number of years you have left on you loan.
Call us and ask how!

Also read: http://dealbook.nytimes.com/2012/04/03/review-finds-flaws-in-more-than-138000-bank-foreclosures/

Chapter 11 and Rental Property

Chapter 11 Bankruptcy is a great way to knock out a lot of the negative equity in rental properties.  An example of a resent case we filed had 10 rental property’s located in Jacksonville Florida, Orlando Florida and Miami Florida. Since the person lived in Jacksonville we filed them in our Jacksonville office. The chapter 11 allowed us to cram down each house based on the present values and we averaged about 4.75%fixed rate over a 25 year period.  This allowed the person to cover the principle, interest, property taxes and property insurance with the money they were receiving in rent.  Some property’s had a surplus that helped with less performing properties and with repairs.

Chapter 11 Business and Personal Bankruptcy

Chapter 11 Business Bankruptcy allows a business to reorganize their debts into manageable payments. Each case is different. Chapter 11 is a good idea for a business that maybe overwhelmed with unsecured debt and just can’t make the payments demanded by each creditor. It allows a viable business to reorganize these debts into manageable payments and in a lot of case eliminates most unsecured debts. Chapter 11 is more powerful than a regular chapter 13 bankruptcy in it allows business owners who have secured liens against property, real or personal, to cram down the loan to the present value of the property and lower the interest rate and extend the terms. The growing trend in chapter 11 is for landlords with multiple rental properties to file. The chapter 11 allows each property that is viable or rentable to start fresh by cramming the mortgage down to the present value of each house, reducing the interest rate and extending the life of the loan. Another growing trend is for small business who generally would have just filed chapter 7 liquidation bankruptcy now are filing chapter 11 to save the business. The business just needs to be viable. Meaning, it just needs to be able to show that it would be profitable if it just didn’t have so much debt. There are a lot of nuances to all cases but before throwing in the towel, contact our office for a free consultation so we can see if chapter 11 is the right solution to your financial problems.

Individual Real Estate Investor Chapter 11 cases have been on the rise in FLorida because of the decline in the real estate market.  Real estate investors really have a lot to gain from a Chapter 11.  Below are just a few things that Chapter 11 may be able to do for the struggling investor.

1. It allows real estate investors to lower loan balances to the current market value of the real property and to restructure that loan over a new term with a low, fixed interest rate.

2.  It allows real estate investors to completely remove second or third mortgages from properties where the value is less than the first mortgage balance.  The second and third mortgages are then treated as completely unsecured and are discharged at the completion of the case just like a credit card debt.

3.  It allows individuals to restructure their unsecured debt, including unsecured second and third mortgages.  Individuals have to pay back anywhere from 0% to 100% to their unsecured creditors depending on their particular circumstances.  Even if 100% is required, it is paid back over at least five years with little to no interest and absolutely no penalties or late fees.

4.  It immediately stops any legal proceeding against the individual, including foreclosure proceedings.

5.  It provides a period of time where no payments are made on unsecured debt and smaller payments are made on secured debt which allows individuals to save up a cash reserve to operate.

There are many other reasons for real estate investors to consider Chapter 11 bankruptcy when faced with tough financial times.  Please feel free to setup a free consultation to consider your particular situation and options.