Two Different Situations:
Well, at the risk of sounding boring or predictable, I'm going to continue to harp on the benefits of low interest rates. All that I've said before (as recently as last week) still holds true. Lower rates benefit BOTH sellers and buyers, perhaps for differing reasons, but these rates are beneficial nevertheless! As if to emphasize the cheapness of money, the average 30 year fixed rate mortgage dropped again this past week from the prior week's 4.71% to 4.68%. Now three basis points isn't a lot, but when you apply it to a loan of $500,000 or more, these little points DO add up! Thinking of buying or selling? Get moving--before the rates do so in a direction that will leave you wishing.
The title of this week indicated two areas of discussion. The second of these is something you rarely see here--foreclosure and bankruptcy. That's because, in part, there are other blogs and web sites dealing with these. But let's be honest--these twin financial specters can and do affect people at all levels of financial standing. Even those who earn six figures and have homes valued at or above a million Dollars can find themselves in financial difficulty, often not due to something they did on their own.
It turns out that if you are facing foreclosure, a bankruptcy filing may help you more than you ever previously thought. It seems that while a first mortgage cannot be eliminated in bankruptcy if you plan to continue living in the house (it just becomes one of the debts dealt with in your bankruptcy plan), the second mortgage MAY be eliminatable if there is no remaining equity in the property after the first to support the second. The potential elimination would only occur after the successful completion of your court approved bankruptcy plan, usually over 3-5 years' time, when the second could be eliminated. During the period of the plan's coverage, it is, in essence, placed on hold, pending plan completion. If this situation fits yours, give a call to your attorney. You may find this bit of good news applies to you!