Little Rock Foreclosure

While it may be true that Little Rock was not as hard hit by the Real Estate bubble as some other parts of Little Rock Foreclosurethe Country, we have not been spared the wrath of the sub-prime mortgage crisis. There were times last year that every client that walked through my door had a problem with their mortgage and there are indications that another wave of foreclosures could strike this year. We were able to help most of our clients either walk away from truly bad mortgages or restructure salvageable mortgages in Chapter 13 to save their mortgage if it really wasn’t so bad, but some were unable to save their home despite their best efforts.However, due to the terms of the mortgage contract, some mortgages were just not salvageable. However, some help for troubled homeowners may be on the horizon.

For the first time in several years, I finally have some hope that Congress wants to help the little guy in places like Little Rock and quit being beholden to the rich and powerful banks and special interests that have thus far prevented Congress from allowing local bankruptcy Judges to adjust these mortgages. Many people with an ability to pay have been deprived of their home by the failure of Congress to allow this sensible remedy to be implemented in Chapter 13. While I am not holding out much hope that a law change will be swift in coming, it would at least seem that many in Congress and the current administration are friendly to the idea of letting local Bankruptcy Judges adjust the terms of mortgage notes for the first time and it may actually happen.

Unlike other measures that promised 400,000 people could be helped only to see a handful qualify, projections are that such modification in bankruptcy could stem up to 25% of the foreclosures. This change in the bankruptcy law would allow the average American who has been taken by an unscrupulous mortgage broker to have a fair and sustainable mortgage loan based upon a real valuation of their home. As the various bills make their way through Congress, I will update this blog. In the meantime, if you care about stabilizing the housing market and keeping hard-working Americans in their home instead of having another empty shell on the block, urge your Representatives to put this power in the hands of the local bankruptcy Judges who understand the true value of homes in the area and can provide fair and reasonable interest rates and terms that would allow the bank to be repaid a fair amount and your neighbor to pay for and stay in their home. It is time for common sense…I hope.

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