The answer is of course, yes.

Chapter 13 is an individual reorganization.  You file a plan and you can restructure your debts and the major debts are secured such as car loans and mortgages.

Chapter 13 and Home Mortgages

The rule has always been – you can’t modify a home mortgage for your principle residence. There is an exception to this – for totally unsecured junior mortgages – seconds or thirds. A lot of people lately have been coming in and removing their second or third mortgages.  You have to complete the plan – get into the chapter 13. Remember – the second mortgage has to be unsecured.

You can also now modify your first mortgage – lower your payment and remove the liens behind it – home equity loans, judgments – that sort of thing. Lots of folks don’t know this.

Second mortgages – many are secured – but many are not. Richard Croak says – lots of companies wrote large first mortgages, then turned around and wrote second mortgages. These junior, second mortgages were sold to investors – so about every other person is in a situation to get rid of that second mortgage.

So, if you’re in a situation where you need to take a look at your house payments as they are now – we can take a look at what options you have.

Just go here…

Richard Croak Talks About Mortgages Here!

Chapter 7 questions- bankruptcy court-what is a chapter 7?

Richard Croak Is A Top Foreclosure, Home Loan Modification and BK Attorney For Albany, Dutchess, Renesselaer, Columbia, Greene, Ulster, Schoharie counties in New York.

Richard Croak - The bankruptcy code is divided into primarily odd chapters. Each chapter is for a different type of bankruptcy. Chapter 7 is a liquidation, so it applies to individuals, corporations, small cases – big cases. That is, whenever the debtor is going to give up and throw in the towel – and walk away from their debts. Any non-exempt assets, they file a chapter 7. Most cases today, are called a no-asset chapter 7′s. Individuals usually have enough exemptions to cover all their personal property: their car – their house. Chapter is 7 is for that individual who is burdened down by debut to go forward. It allows you a fresh start.

The problem with chapter 7 is that it doesn’t cure mortgage arrears. Individuals coming in with home mortgage problem or car loan problem, will probably have to file chapter 13 to restructure that debt.  Chapter 13 – like chapter 11, chapter 12 (for farmers) and chapter 9 (for municipalities) allows you to restructure your secure debut and walk away from unsecure debt. I see a big year for chapter 7 filings in 2012.

Back to Richard Croak’s Main Website.

Q: Richard, give us overview of this year. 2011.

Richard Croak – Our business has experienced somewhat of a slowdown because a lot of people have given up on ever coming out of this economic situation we find ourselves in. The economy really hasn’t come back the way it should have. Prices have continued to slide and people are walking away from their houses instead of saving them. A lot of my clients have been doing short sells for some time. Either they can’t find a buyer. When they do find a buyer, then they can’t get the bank to accept an offer. And the bank keeps asking them to do a short sell which is kind of odd, because the paper work keeps coming back. That’s been the way this year has gone. Bankruptcy filings were going up, but by the summer – they began to go down.

Q: And, earlier flooding this year put some farmers in jeopardy

Richard Croak - That’s correct. You can still come in – and we’ll take a look at your situation.

Q: What about 2012?

Richard Croak - I predict the first quarter of next year will see more foreclosures. Many of the banks had been holding back – because of their loan documentation failures. There’s a new wrinkle out there. The federal reserve and office of the currency have now started this program where they are going to do some kind of investigation or evaluation of how the banks have done through this foreclosure process. But the problem is – that many of these loans can’t even be documented and couldn’t be foreclosed because, they couldn’t even find the documents.

If you have given up what need do you have for a chapter 7 bankruptcy. You do not need a fresh start if you are just not going to start. You don’t file chapter 13 to save your home if you are giving up the house or as seems to be the more common case the bank has given up trying to foreclose. Contrary to popular perception bankruptcy is not for quitters. Bankruptcy is what winners do. Bankruptcy is what Andrew Jackson, Henry Ford and RJ Macy did before they became successes.

In conclusion it is my belief that we have hit a bottom. It may not be the last bottom in this mess, but I believe the path is up from here and now is not the time to give up.

The other issue with foreclosures – is that we are finding that the attorneys attempting to foreclose for the banks have not been with complying with the various statutes that exist in the state of New York for mortgages.

There was an individual that came in that had a major bank filing a foreclosure action as a trustee. They began this foreclosure about a year ago. Did everything right. The individual was given this summons of complaint. About a month after the papers were signed – the Mortgage Electronic Registration System sent to the bank, the assignment of the mortgage. The original company that has the mortgage, ceased to exist. It was re-assigned – and that company is no longer around. In the meantime, MERS was sitting there strictly as  a nominee – and several courts now say the nominee has no right to assigning a mortgage, particularly when the original company is no longer in existence. The note is nowhere to be found. Recent cases have said – that the noteholder has the right to foreclose. Banks say they have the note, claiming to own the note because they are holding the note. All of this being complicated – and the average person needs to see an attorney.

The people in this particular case are still in their house – and are seeking loan modifications.

Richard Croak – The big news appears to be a continuation – whether the mortgage electronic registration service is a holder of a mortgage and whether they have the right to assign it to another party. The courts of New York have been coming down consistently, that they don’t have the right to assign the mortgage. They have the right to represent the person who has nominated them.

Q:  So,what’s happened here?

Richard Croak – What’s been happening consistently is individuals went to a mortgage settlement to close their mortgage. When they did that, they were signing a mortgage that nominated this mortgage electronic registration service, to be the nominee of the bank they were dealing with. A year or two later, they get a notice saying their mortgage has been assigned to another bank. And, a week or so after that, they get another notice saying that their mortgage is being held by another bank. What happens is, the mortgage broker – the entity that generated the loan, immediately assigns it to the company that finances it. That company now, turns around and sells the mortgage on the open market.

Q: But the mortgage never actually gets transferred.

Richard Croak  – That’s correct. What happens is that the mortgage goes on this electronic filing system, and then, after something happens such as a foreclosure, the mortgage is assigned to theoretically, whoever is holding it at that time. That could be Bank of America, Chase, JP Morgan-Chase, Wells Fargo. Any of the larger banks. Often, they are representing themselves as the agent for a series of bond holders. But, when you look at the documents closely, you’ll see that one of the last documents is an assignment by this electronic registration service to current servicer – say a Bank of America or a Wells Fargo. Often, this occurred after the mortgage case was filed.

Q:  So, the question is – is this right?

Richard Croak – Often, the New York courts are saying, it isn’t right. As a nominee, you don’t have the right to assign. You have the right to appear for them. IN other word, MERS can file the foreclosure,  can’t act as assigner for somebody else who is not appearing .

Q: What was the original reasoning for this?

Richard Croak – Allegedly, for the purpose of saving filing fees.  But what appears more of what it was done for, was the process of breaking the mortgage note. It now goes from the closing table to some other bank, to some other bank etc. That bank may or may not be available now. The note may not be available now. Here in New York, to foreclose on a mortgage, the courts are saying you have to have a note and a mortgage.

Q: So, how is this being solved?

Richard Croak  – The courts are throwing out the foreclosures. They then, have to go back and start again. That the various parties have to have the proper documents and exchanges. That’s why, anybody getting foreclosed needs to sit down – and see a knowledgeable attorney. New York state has a rule that says attorneys fees provided for the mortgage, and that foreclosure gets tossed-out, you’re entitled to get attorneys fees the way the bank would.

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Q: Richard, you recently attended a seminar.

Richard Croak – At the seminar we were talking about some of the issues that were coming down on lost mitigation in bankruptcy court. One runs in Rhode Island – a program that was subject to appeal. That was withdrawn and it looks like that system is functioning pretty well.
Q: One of the few places in this country. What exactly is this?
Richard Croak – That’s a process of bankruptcy where you can file a motion to request the mortgage holder coming in and discuss the possibility of modification. There’s a present proposal in Congress to make the loss-mitigation program nationwide.
Q: This is about somebody in court to make sure the banks show up and talks about it.
Richard Croak – That’s correct.
Q: Tell us where it all us – MERS update?
Richard Croak – The bank’s current theory on why they own the mortgages – seems to be that they have physical possession. They’re writing affidavits by people who believe they must have gotten them legally because they now have possession.
Q: That’s amazing. And today, how long can someone expect to stay in their home if they just filed for foreclosure?
Richard Croak – In New York, they can probably expect two years.
Q: In that two years, they can still re-negotiate their loans?
Richard Croak – Yes it is, but they must do it now, because it’s about to sunset.

Richard Croak – Well, the foreclosure process has developed a rather unique wrinkle. It would appear that many of the mortgages that were issued by smaller mortgage bankers or mortgage brokers during the 2006 or 2007 period, may not have ever been assigned to the server suits who were trying to collect on them.

Q: What does that mean for people with those mortgages?

Richard Croak – It means that the parties attempting to collect the money may have no legal right to do so. We discovered what we thought was one or two odd cases, may be thousands of just clear fraud, where the documents that are being presented are either forged or are just not presented at all. The party tries to skate through on the fact that they never actually got delivery of the mortgage.

Q: What do you think will be the outcome? How will this unfold?

Richard Croak – I think there are some serious problems there. It’ll be a question to whether the mortgage companies can come back into the courts and start foreclosing. Right now they are not and you can see why, as some of these mortgages can’t be foreclosed, upon any circumstances.

Q: This should be a concern to anyone who took out a mortgage in 2006 and 2007.

Richard Croak – That’s correct: even if you are not in foreclosure. Forewarned is the policy. If you have a mortgage with a small bank or lender, you could be paying the wrong party and someday, the right party may show up and say, “you owe me all this money.” You really have to check to see; in fact, that the party collecting has the right to collect.

Q: You should be getting some phone calls. If you have any questions, call Richard Croak.