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Recently I have been getting asked how long the foreclosure process takes. There is no standard answer to that question. I work in New York which has what is referred to as a judicial foreclosure process. To foreclose the bank must commence a law suit. The cases often take a year or more. Right now the Courts are imposing mandatory conferences which delay the process and bankruptcy will delay the process further. It is not always necessary to win if you can simply not lose.

Just had my first success today in a post modification foreclosure action. Client had a temporary modification of his mortgage made all the payments and at the end got a summons for foreclosure. I filed an answer saying there was no actual default and today the attorney for the mortgage bank withdrew the action.

I will be on Channel 13 tomorrow morning May 22, 2010 sometime after 7:30 am to talk about foreclosures.
As a preview foreclosures are up this year in New York State about 11% and they are up in the Capital Region, but still well below the national average. The problem is that default rates are not running so far below the national figures. So expect foreclosure to go up locally even if they come down on a national basis.

I keep hearing commercials for mortgage loan modifications. I am wondering if there is anyone who has used one of these firms or companies who would share their experience with me. I have had some success with these modifications, but they are very unpredictable so I wonder how these firms can advertize that they can get results.

On NBC this morning they had a segment on property taxes. Later in the morning someone emailed me with a question that actually was on the same subject. This is the time you need to consider the objection to your assessment. It is the most certain way to lower your home payment. I have done this myself and it works.

Currently I am seeing two factors at work in the modification process:

1. Trial modifications that are now being denied permanent status by the lender.

2. Great uncertainty as to what the current rules are.

My feeling is we are building toward a crisis of some kind.

The credit industry has lately sent out misinformation about what effect bankruptcy has on student loans and employment. Title 11 section 525 prohibits lenders from considering prior bankruptcy filings in regard to loans which are part of the goverment student loan program, and it also prohibits private employers from considering bankruptcy in regard to employment. Nevertheless the NBC Today show experts warned about the effect of bankruptcy in both regards without mentioning the legal prohibition against such discrimination.

I have seen quite a few loan mods under HAMP that is the government supported program. They all have one thing in common the refusal of the borrower to take no for an answer.

Among the absolute worst things to do is to borrow against a retirement plan to pay off unsecured debts such as credit cards. This occurs to me now because the clients I saw today all did this. It hurt them in different ways. Several reduced their take home pay so much they had trouble paying mortgages and car loans. But the last person of the day lost his job after the loan from his 401k and was unable to pay back. He now has a big tax bill. Never borrow from your 401k to pay debts I have never seen a good result.