Colorado Springs foreclosure lawyers understand that while rising home prices have helped to pull some homeowners from the debts of this housing crisis, younger homeowners are still facing an uphill battle.
According to real estate database Zillow, the percentage of homeowners who were underwater, or owed more on their homes than they were worth, dropped to about less than 1 percent (to about 31 percent)in the second quarter of 2012. This is somewhat encouraging, but of the 15 million borrowers who remain underwater, a huge portion of those are below the age of 40.
In fact, about half of all borrowers in this age bracket are underwater. This is double what the underwater rate is for older borrowers.
What we're likely to see as a result is a stagnation in the economy. That's because when these borrowers can't move out of their starter homes into bigger homes, those younger couples seeking starter homes have a harder time doing so. That means they are more likely to rent or continue living at home for longer stretches of time.
These under-40 underwater borrowers, in order to sell their home, either have to come up with a lot of cash upfront or go through a short sale.
What they don't necessarily have to do is simply walk away. Our Colorado Springs foreclosure lawyers know that the entire process seems daunting and frustrating, but you do not have to endure it alone.
Our attorneys are experienced at finding foreclosure alternatives, such as loan modifications and principal loan reductions. These are available with increasing frequency as the government works to settle with major banks over foreclosure abuses and other housing wrongs. So even if you were previously unsuccessful in working out an agreement or modification on your own, there's a strong likelihood that we can help you negotiate better terms with your mortgage lender.
This may help you avoid both foreclosure and/or bankruptcy, depending on how deep in debt you are.
Unfortunately, many homeowners simply struggle to pay the current price in the hopes that the market will rebound and they will be able to make their money back. The fact is, you may never fully recoup the losses on the investment you made in your home. However, you shouldn't have to go broke just trying to pay your mortgage.
We can help.
For the last five years, Congressional intervention has meant that underwater homeowners wouldn't face tax penalties when a portion of their debt was forgiven upon foreclosure.
However, Colorado Springs foreclosure defense lawyers know that protection is set to expire at the end of the year.
This means if you're on the verge of foreclosure, the time to seek help is now. If it ends up not being worthwhile to stay and fight for your investment, you could end up paying tens of thousands of dollars in income taxes if you wait until after Dec. 31, 2012.
In most cases, if you have a good attorney, you can save your home by negotiating a significant reduction on your principal payment through a loan modification. This is going to lower your monthly obligations, making it easier for you to keep up with every month. This is particularly helpful to homeowners who were caught up in the housing crisis, where they purchased their home for far more than what it was actually worth. Reducing the principal balance can bring your payments back in line with what would be considered a fair market value.
However, there are a few situations when it may make sense to initiate what is called a strategic default, which is where you simply walk away from the home and allow the bank to foreclose without a fight. This is rarely advisable because it is so harmful to your credit. However, sometimes it can be worth it when there is no way you'd be to keep up the payments and the bank absolutely won't work with you.
Prior to 2007, the statute was such that if your home was foreclosed upon, the bank had the option of "forgiving" the difference between what you owed and what was paid for the property. However, this "forgiven" amount was deemed income by the federal government - income upon which you had to pay taxes. When the housing crisis hit, Congress stepped in and allowed an exemption, meaning homeowners wouldn't have to consider this income.
What was originally intended to be a three-year relief was extended another two years. But now, it's going to expire. That means if you are forgiven $20,000 worth of the mortgage, you will have to pay taxes on that $20,000 as if it were in your pocket. If you're facing foreclosure, chances are this is money you don't have.
The bottom line is that if you are facing foreclosure, you need to act now so that you can get the matter settled before the expiration of these tax benefits, should you need them.
With the economy continuing on a downward spiral, millions of people are battling debt, foreclosure andbankruptcy in Colorado Springs and across the country. For many people, the stress can be overwhelming.
Medical experts have long warned that stress is a major catalyst for a number of serious and potentially life-threatening physical ailments, including weight gain, heart disease, gum disease, gastrointestinal problems and more.
It's a vicious cycle because the more stressed you are, the more your health suffers and the more you end up shelling out on health care - almost twice as much as someone who is carefree, according to researchers with the Health Enhancement Research Organization.
Many of the financial troubles you face can be addressed with help from an experienced Colorado bankruptcy attorney. Tackling your personal financial struggles with someone who has helped thousands of people in similar situations will not only augment the balance on your bank statements, it will also improve your well-being.
In addition to taking this crucial step to free yourself of these financial burdens, there are other steps you can take to alleviate these concerns.
First, seek help from your employer. According to a 2010 study by Buck Consultants, nearly three-quarters of all U.S. employers offer some form of wellness program, which encompass everything from discounted yoga classes to reimbursements for gym memberships. Stepping up your work-out routine will help to clear your mind and give you confidence to keep that same momentum in other aspects of your life.
If your company doesn't offer this type of reimbursement, look on sites like Groupon or search for trial memberships that might give you a few weeks free. Many gyms also want new customers, so they may be willing to cut you a deal directly if you ask.
Secondly, consider talking with a counselor. Many employers offer free or reduced-cost access to counselors on a weekly or monthly basis. Some also offer group sessions, which specifically address techniques to manage stress.
And finally, take some time each day to breathe deeply. A recent study conducted by researchers at Harvard found that meditating each day improves a person's memory and reduces stress. Even a few minutes a day can make a huge difference.
Misconceptions about bankruptcy abound in America, which is a great shame because it prevents many people from getting the debt-relief help that they so desperately need.
One of the many misconceptions about bankruptcy is that your property will be seized to help pay off your debts, and that you won’t be able to keep your house, your car, or other important properties.
This misconception is actually the opposite of the truth! In reality, without the protections offered by bankruptcy law, creditors can put liens against your property, repossess your car, or any number of other debt-payment options.
Bankruptcy isn’t about helping the creditors, it’s about helping you, the consumer. Bankruptcy law offers the average person protection from predatory lending schemes and out-of-control debt, and as such, it allows you opportunities that you wouldn’t normally have.
For example, under current Colorado law, you’re allowed to keep a vehicle with up to five thousand dollars’ worth of equity, which is most cars. For example, if your car is currently worth ten thousand dollars, and you owe more than five thousand dollars for it, then you can keep it. Further, a leased vehicle can be kept regardless of the cost.
Likewise, you can keep up to sixty thousand dollars in home equity.
Those figures may not sound like much money, but when you consider that most people actually owe more than their car or home are worth, it begins to sound much more reasonable!
Don’t let your fear of losing things keep you from consulting with a bankruptcy attorney, because they could save the things you care about most!
If Democratic state lawmakers are successful, the simple signature of a bank-employed attorney will no longer be enough to push through foreclosures in Colorado.
A new bill targets a years-long practice in Colorado that unfairly skews the benefit toward large financial institutions. Under the current system, attorneys paid by banks are allowed to rubber stamp the bank's right to pull a home out from underneath its owner - without having the proper mortgage documents to back it up. In the last few years, this has meant a windfall for bankers and led to a crisis whereby people were forcibly removed from their homes by a lender that may not have had the right to do so.
The problem started in 2006, with a change to state law that seemed to go largely unnoticed. It allowed banks to take a person's home with scant evidence, aside from the signature of the bank's attorney.
While the entire U.S. banking industry has come under scrutiny for less-than-savory practices throughout the housing bubble burst, our Colorado Springs foeclosure attorneys recognize that our state has not done nearly enough to protect homeowners.
The Denver Post reports that many banks are being scrutinized because for decades, lenders traded, bought and sold mortgages as securities. However, those deals were rarely recorded in property records. Then, when homeowners began getting notices of foreclosure, the paperwork originated from a bank they had never done business with. For many, the question of who actually owned the rights to the home loomed large. As Colorado homeowners tried to sort through a convoluted paper trail, banks easily claimed their own rights with the stroke of a pen.
Rep. Beth McCann of Denver, who is sponsoring the bill, told the Post that the integrity of the foreclosure process is at stake.
"This bill prevents a lawyer from saying a bank can foreclose simply on their say-so," she told the paper. "That's a huge presumption."
Another aspect of the foreclosure process that HB12-115 addresses is how judges review individual cases. Right now, judges almost always approve auctions. The only thing a judge really analyzes in a case is whether the homeowner hasn't paid and whether he or she is in the military. They don't look at whether the bank or lender requesting the auction is actually authorized to do so.
It wasn't always this way. A 1989 decision by the state's supreme court gave Colorado homeowners the right to challenge a bank's standing in a foreclosure proceeding. The 2006 legislation, however, overruled that right.
Statistics can be deceiving.
While recently-released figures seem to indicate that home prices are actually up, the reality is that we may soon see a glut of foreclosures in Denver, Colorado Springs and across the country.
Our Colorado Springs foreclosure lawyers know that it has a lot to do with people who are underwater on their homes, and yet are hanging on by their fingertips, hoping the market will do an about-face so they won't lose as much money. this means there are fewer homes actually on the market, which is driving down the supply, and therefore increasing the demand. There have even been bidding wars in a few cases.
When we look at the figures across the country, we see an increase of little more than 1 percent on home prices, when compared to a year ago. While this may seem minimal, you have to remember that the value of homes plummeted after the market tanked in 2008. The fact that it's inching up at all is seen as an improvement - until you really analyze what's going on.
Of course, it is good for those homeowners who are looking to sell right now. They're probably still going to take a loss, but it will be blunted by this short-term spike.
However, this is not going to last long-term because we still have a large number of people who are on the brink of foreclosure. They may be making the minimum monthly payments, but just barely.
This is where our Denver foreclosure lawyers come in. First of all, if you're trying to remain in your home, we can look into helping you secure a loan modification, meaning we could fight for your loan amount to be lowered to what would be considered a fair market value.
However, there may be some situations in which it actually makes fiscal sense to default and allow the loan to go into foreclosure. Of course, that's not a decision you should make without the assistance of a skilled attorney, and we can help guide you through the process.
The other thing that is going to eventually work against these homeowners is that you have banks that are scrutinizing their loans more closely than ever, combined with a populace that has a higher track record of poor credit scores. This is ultimately going to drive down that demand.
A report released recently by the federal Government Accountability Office indicates that more than 300 members of the military had their homes illegally foreclosed upon in the last few years.
Our Colorado Springs foreclosure lawyers know that there are special protections in place specifically for members of the armed forces. Unfortunately, sometimes those rules are not properly applied by banks and mortgage lenders - which is why these soldiers will need someone who will fight for them.
Here's what is happening:
The Servicemembers Civil Relief Act, or SCRA, sets forth a number of provisions to protect those in the armed services from being unfairly closed upon, particularly while they are serving active duty assignments overseas.
Those protections include:
However, despite these protections, the mortgage companies are not following through. Mortgage lenders either aren't noting when a homeowner is on active duty, or even when they are, the terms are ignored anyway.
Soldiers face unique challenges with a foreclosure because when they are assigned to a different base, they can't sell their old home. As in a lot of cases these days, they may owe more than the home is worth.
Soldiers who are moved to a new base are supposed to automatically receive approval for a short sale if the home was bought prior to the end of June and the loan was owned by either Freddie Mac or Fannie Mae.
Also, earlier this year, the U.S. Justice Department reached a deal with four major lenders - Citigroup, Wells Fargo, Ally Financial and JPMorgan Chase - regarding wrongful foreclosures against servicemembers. Any soldier who was wrongfully foreclosed upon is entitled to a minimum payment of about $117,000. Compare this to non-military borrowers, who under the recent $25 billion settlement agreement reached with 49 states' attorneys general, receive about $2,000.
Colorado Springs foreclosures still account for a large part of the market sales, according to a recent report by the Denver Business Journal.
For those battling a foreclosure, it's more than dollars and cents. It's about an emotional attachment to the place you call home, and choosing to let it go can be extremely difficult. It also may not be necessary.
Our Colorado Springs foreclosure lawyers can help you sort through the pieces to determine what your best option is.
The most recent statistics, culled from a Realty Trac quarterly sales report, indicates that although sales of foreclosures are actually down nearly 14 percent compared to this time last year, foreclosures still accounted for nearly a third of all home sales in the state.
Throughout Colorado, that equaled nearly 7,000 foreclosures sold, with an average price of approximately $180,000.
What is somewhat encouraging is that when you look at foreclosure sales across the rest of the country, Colorado is actually in better shape than most places. The average price for bank-owned foreclosure sales in the U.S. was about $20,000 less than in Colorado.
Rebounding home prices mean that the housing market overall is in better shape - which could mean you might actually be less underwater on your payments than you once were. That doesn't mean foreclosure might not make sense for you - but it may give you a little more leverage than you might have had otherwise.
The state with the highest number of foreclosure sales was Nevada, which reported nearly 60 percent of home sales were attributable to foreclosures. That was actually a drop of 5 percent from last year, though the average price per foreclosed home there was slightly less than $117,000.
California reported high foreclosure rates as well, with about 47 percent of total home sales. There, average prices were about $235,000 (though California has always had a more expensive cost of living than most states).
In some cases, Realty Trac analysts have said that an increasing number of distressed homeowners are looking to short sales to avoid foreclosures. This is one option to avoid the stain of a foreclosure on your credit score, but still get you out from underneath an underwater home.
A multi-billion national settlement among 49 states' attorneys general and five major banks will have implications for those who endured a Colorado Springs foreclosure.
Our Colorado Springs foreclosure attorneys have been closely following the news regarding the settlement, which aims to reduce the mortgage payments for those who are underwater on their homes, as well as grant monetary relief to those who may have been unjustly forced from their homes.
The settlement amounts to $26 billion in all. But what does it mean for you?
To understand this, we have to first look at what the loan servicers and mortgage lenders agreed to do. The servicers and banks essentially have pledged about $17 billion that will go toward decreasing mortgage payments for homeowners who owe a great deal more than their home is worth and who are behind on those payments. This is expected to equal out to about $20,000 of reduction for each homeowner. For those whose mortgages are held by Bank of America, those reductions could be even greater, equaling about $100,000 or possibly more.
Another thing that these entities agreed to do was refinance mortgages for homeowners who are up-to-date on their payments. This will allow them to clasp onto the low interest rates that are available right now.
Next, the banks have committed about $5 billion to the federal and state government. With that money, homeowners who were improperly forced from their homes will receive lump sum payments of between $1,500 and $2,000 - barely the cost for moving expenses, but certainly a start.
Another $1 billion is being paid to the Federal Housing Administration by Bank of America, the parent company of Countrywide Financial, which is alleged to have defrauded the federal housing agency.
The settlement also requires that banks get rid of their robo-signing techniques altogether. This was essentially a technique in which banks would churn out hundreds of foreclosure documents each day, often with agents having no verification of the facts to which they were attesting.
If your home was foreclosed upon between 2008 and 2011, you may be eligible to receive a payment, and you should notify your bank. The exact amount of the payment is going to depend on how many people seize on it - and about 750,000 are expected to do so.
Foreclosure numbers in Colorado fell in 2011. But most experts believe this has less to do with the real estate market recovering and more to do with a delay in filings by the country's biggest banks.
Some people believe they can fight back against banks by attempting to show that the bank filing the foreclosure doesn't actually own the note. But our Colorado Springs bankruptcy attorneys believe there is another option that is more beneficial to Colorado Springs homeowners.
That option is filing for bankruptcy in Colorado Springs.
Did you know that filing for bankruptcy immediately stops a foreclosure? Whether your home has just received its first default notice or is slated to be sold at auction, filing for bankruptcy halts the process.
This can buy homeowners valuable time while they attempt to get their finances in order. Through the bankruptcy process, consumers can discharge their outstanding debt, such as from credit cards, medical bills and other loans, which can enable them to again make house payments.
Or, perhaps homeowners are currently in a house that has an underwater mortgage, meaning they are paying more on the loan than the house is worth. Many people are in that position. Filing for bankruptcy may allow the homeowner to get rid of their debt and their house after the foreclosure process has gone through.
The Denver Business Journal recently reported that Colorado saw a 28.6 percent dip in properties with foreclosure filings from 2010 to 2011, but the state still had one of the top 10 highest foreclosure rates nationwide, foreclosure tracking company RealtyTrac.
One out of every 56 houses had a foreclosure notice last year, totaling 38,557 properties. In December, one in every 620 properties went into foreclosure, a 7.29 percent drop from November.
Most analysts believe that foreclosure numbers dropped in 2011 because big banks in 2010 halted their foreclosure practices after investigators found out they were using "robo-signing" tactics and other unlawful means to take away people's homes.
If you are struggling with debt and need to speak with an experienced Southern Colorado bankruptcy lawyer, contact attorney Stephen H. Swift at 719-520-0164 for a free initial consultation.