Loss Mitigation and Loan Modification in Bankruptcy Court

On September 19, 2016, in Bankruptcy, by Robbie L. Vaughn, Esq.
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(Bankruptcy Court -EDNY – Central Islip, NY)

Bankruptcy Court’s Loss Mitigation Program

In 2009, The United States Bankruptcy Court – Eastern District of New York adopted a Loss Mitigation Program which applies in all individual Chapter 7, 11, and 13 cases.

The Bankruptcy Court’s General Order #543 provides the following:

The term “loss mitigation” is intended to describe the full range of solutions that may avert the loss of a debtor’s property to foreclosure, increased costs to the lender, or both. Loss mitigation commonly consists of the following general types of agreements, or a combination of them: loan modification, loan refinance, forbearance, short sale, or surrender of the property in full satisfaction. The terms of a loss mitigation solution will vary in each case according to the particular needs, interests, and goals of the parties.

Loss Mitigation may be requested by a debtor or creditor.  Also, the Bankruptcy Court may enter a Loss Mitigation order at any time after notice to interested parties.  However, in our experience, the Debtor’s attorney typically files a motion requesting loss mitigation in an effort to obtain a loan modification for the debtor.

We currently have several clients who are participating in the loss mitigation program. The program has some similarities to foreclosure settlement conferences held in state court, but appears to move along at a much faster pace.

You can click here to watch a video entitled “Loss Mitigation and Mortgage Modification in Bankruptcy Courts.”

Additionally, you can always call the Law Firm of Vaughn, Weber & Prakope, PLLC at 516-858-2620, to speak with an experienced bankruptcy attorney.

 

Mortgage Forgiveness and Bankruptcy

On October 19, 2012, in Bankruptcy, Foreclosure, by Robbie L. Vaughn, Esq.

Mortgage Forgiveness and Bankruptcy

Bank of America mortgage forgiveness and bankruptcy

Recently we have written about Bank of America forgiving second mortgages and the National Mortgage Servicer Settlement. Many homeowners facing foreclosure are anxious to find out if their second mortgage will be forgiven by Bank of America.

Well, it appears that one pattern may have emerged. Many homeowners who have already filed bankruptcy are receiving letters stating that their 2nd mortgage will be forgiven. Great news, right? Maybe.  Some of these debtors are in active bankruptcy (chapter 7 & chapter 13). Some debtors have already received a bankruptcy discharge and are no longer personally liable for their mortgages. Other debtors have “stripped” their 2nd mortgages and BOA will likely receive much less than 100% of what is owed on the 2nd mortgage.

Not So Good

  • It appears that BOA may receive credit, against the amount it owes under the National Servicer Settlement Agreement, by forgiving mortgages they can could no longer collect or only collect a portion of. This may lead to fewer distressed homeowners actually benefiting from the Settlement.
  • There may be tax issues (the advice of a tax professional may be necessary).

Good

  • Distressed homeowners who are not in bankruptcy are receiving letters from BOA stating that their 2nd mortgages are being forgiven. This will make it easier for some homeowners to avoid foreclosure.
  • Debtors in bankruptcy who are paying back 100% of the arrears on their 2nd mortgages and their full 2nd mortgage payment have received notification that their loan is being forgiven. This could alleviate the need for a chapter 13 bankruptcy altogether.
  • Some homeowners may find themselves with instant home equity.

Nassau County Foreclosure Attorney

If you have any questions about this or other legal issues, call The Law Firm of Vaughn, Weber & Prakope, PLLC, at 516-858-2620, for a free consultation!

+This is not tax or legal advice.

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Free Foreclosure, Loan Modification and Bankruptcy Assistance

On September 26, 2012, in Bankruptcy, Foreclosure, by Robbie L. Vaughn, Esq.

Free Foreclosure, Loan Modification and Bankruptcy Assistance

The following article appeared in Today’s New York Newsday:

Nassau County homeowners at risk of losing their homes can get free housing and legal advice on Monday, Oct. 1.

The Nassau County Bar Association will hold its monthly foreclosure clinic from 3 to 6 p.m. at its headquarters at 15th and West streets in Mineola. Volunteer attorneys will offer one-on-one guidance about foreclosure, loan modification and bankruptcy. Federally certified housing counselors will also be available.

Residents who meet income guidelines can meet with Nassau-Suffolk Law Services, which provides reduced-fee legal services.

Attorneys who speak Spanish will be on site, and those fluent in other languages can be made available upon request.

Those attending should bring their mortgage documents to the clinic. Reservations are required, and can be made by calling 516-747-4070.

The Law Firm of Vaughn, Weber & Prakope, PLLC  assists residents of  Nassau county, Suffolk county, Queens, Brooklyn, Bronx, Staten Island, and Manhattan with their bankruptcy filing, loan modification, and foreclosure defense. Call (516) 858-2620 for a FREE consultation!

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File Bankruptcy, Lose Rent Stabilized Apartment

On September 19, 2012, in Bankruptcy, by Robbie L. Vaughn, Esq.

Rent Stabilized Status Lost in Bankruptcy

Will filing bankruptcy cause you to lose your rent-stabilized apartment?

Quite possibly.

On April 10, 2012, the United States Bankruptcy Court, S.D. New York ruled that a chapter 7 debtor could not exempt the value of her rent stabilized lease (SeeIn re Santiago-Monteverde, 466 B.R. 621 (Bankr. S.D.N.Y. 2012).  Unfortunately,0n September 10, 2012, the debtor lost her appeal to the United States District Court, S.D. New York.  The District Court affirmed the bankruptcy court’s ruling which rejected the debtor’s argument that the value of her rent-stabilized lease is a qualifying local public assistance benefit under section 282(2) of New York Debtor and Creditor Law.

It appears that the debtor’s chapter 7 case was going rather smoothly until the chapter 7 Trustee received an offer from the Debtor’s landlord to purchase the Trustee’s interest in the Rent-stabilized lease.  This set off a chain of events which, for the time being, have resulted in the debtor potentially being forced out of her rent-stabilized apartment.

Thus, until legislation is enacted which allows debtors to safely exempt the value of their rent stabilized lease, bankruptcy practitioners will have to tread carefully when dealing with a debtor who leases a rent-stabilized apartment.

Bankruptcy Attorney in Mineola

If you would like more information regarding the subject of this post or a free consultation with a bankruptcy attorney, call the Law Firm of Vaughn, Weber & Prakope, PLLC at 516-858-2620.

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The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. This website is Attorney Advertising. It does not form an attorney-client relationship. We are a debt relief agency and a law firm that helps people file for bankruptcy relief under the U.S. Bankruptcy Code – Title 11. Prior results do not guarantee a similar outcome. Proudly assisting residents of Long Island, Nassau county, Suffolk county, New York City, Queens, Brooklyn, Bronx, Staten Island, Manhattan