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Category Archives: Bankruptcy

The advantages of a full-service law firm coupled with a title insurance company

Author By Christopher P. FinneyPosted on

There are many law firms in greater Cincinnati, some special-purpose and some full-service, and there are many title insurance companies, commercial- and residential-focused.

But as a lender, as a consumer, as an investor, as a Realtor, what are the advantages to having a robust title insurance company coupled with a full-service law firm?  We think there are several.

  • First, from a real estate transactional perspective, we offer significant depth of experience and breadth of services to residential and commercial buyers and sellers, as well as lenders: closing and title services, leases, seller financing documents, and post-occupancy agreements.  We also can handle zoning and regulatory matters relating to your property.
  • Our litigators can vigorously litigate to enforce the contracts that we write and that you sign, or defend against such actions.
  • We can handle sophisticated matters relating to bankruptcy, probate administration, and the business components of a real estate transaction.
  • Finally, our property tax valuation team can assure you are not paying more in taxes than the law requires.

We strive to produce the same high-quality product and responsive customer service across each practice area of the Finney Law Firm and with Ivy Pointe Title.  We invite you to let us show you how we can “make a difference” in your real estate matters.

Chapter 7 debtor cannot strip wholly unsecured 2nd mortgage

Author By Finney Law FirmPosted on

In the important case of Bank of America, N.A. v. Caulkett, 135 S. Ct. 674 – 2014, the US Supreme Court has held that debtors in a Chapter 7 bankruptcy proceeding may not void a wholly unsecured junior mortgage lien under 11 U.S.C  §506(d) when the debt owed on a senior mortgage lien exceeds the current value of the collateral if the credi­tor’s claim is both secured by a lien and allowed under §502 of the Bankruptcy Code.   The Court overruled and reversed the Eleventh Circuit decision  rendered in McNeal v GMAC Mortgage, LLC, 735 F.3d 1263 (11th Cir. 2012) which allowed wholly unsecured liens to be stripped.

The Supreme Court ruled that  §506(d) does not permit bankruptcy courts to “strip off” completely unsecured junior mortgage liens on the property even if the value of the property acting as collateral is less than the amount the Chapter 7 debtor owes to the first (senior) mortgage holder.   In making its decision the Court extended on its ruling in Dewsnup v. Timm, 502 U.S. 410 (1992), which held that §506(d) does not allow a Chapter 7 debtor to “strip down” a partially mortgage lien to the current value of the collateral.

Chapter 7 Debtors are now left to look to filing for Chapter 13 or Chapter 11 reorganization plan to obtain the partial or complete lien strip that Dewsnup and Caulkett denies to a homeowner.

Read the complete decision here.

Getting a Mortgage after filing for bankruptcy or losing your home in foreclosure?

Author By Finney Law FirmPosted on

How long will it be until I can buy a house again? This is one of the first questions many people ask when filing for bankruptcy and/or after losing a house to foreclosure. The common misconception, often perpetuated by creditors, is that you will never be able to buy another house or that you will not be able to for ten years. This is just not true. New programs allow debtors to purchase a home much faster than they usually think is possible.

The mandatory waiting periods to apply for mortgages backed by Fannie Mae, United States Department of Agriculture (“USDA”), or the Federal Housing Administration (“FHA”) is between one and four years depending on your situation and the type of loan you apply for.

Conventional loans backed by Fannie Mae backed loans have a longer waiting period than those backed by the FHA. Individuals who receive a discharge in a Chapter 7 bankruptcy have to wait four years from their discharge date. Those who filed Chapter 13 bankruptcy have a two year waiting period from the date of discharge. If your Chapter 13 bankruptcy was dismissed you must wait four years from the date of dismissal.

USDA loans carry a three year waiting period for a Chapter 7 discharge. During a Chapter 13, you can receive a USDA loan as quickly as 12 months after filing. You must have both court approval and evidence 12 consecutive Chapter 13 Plan payments. You are also eligible for a USDA loan one year after your Chapter 13 discharge.

The FHA’s new programs may offer the best possible solution for those who have filed for bankruptcy or lost their home to foreclosure. The FHA’s Back to Work – Extenuating Circumstances program allows borrowers to qualify for a new FHA loan just one year after a foreclosure, short sale, deed in lieu of foreclosure, or bankruptcy. This program began on August 15, 2013 and is set to expire September 30, 2016. Not everybody will qualify for this new program but it may be very beneficial for many borrowers.
Individuals can also receive an FHA loan during a Chapter 13 bankruptcy as long as that individual has made 12 months of satisfactory Chapter 13 plan payments and has the Court’s approval.

Your credit score will affect the rates you receive on post-bankruptcy mortgage loans. Your credit score will be low immediately after you file but should consistently rise as you maintain your monthly payments and do not have any further delinquent payments.

As always, please discuss any and all programs with your bankruptcy attorney before deciding on a certain course of action.

How can Chapter 13 Bankruptcy help me keep my home?

Author By Finney Law FirmPosted on

One of the most common questions people ask when considering filing for bankruptcy is whether or not they can keep their house. This makes sense as a house is often the most valuable asset you own and the place you live and raise your family. Many people fall behind on their payments due to an unexpected income reduction due to a job loss or illness. Later, they find a new job and/or their financial situation changes and they need a way to catch up their house payments to stop the bank from foreclosing against their property. Chapter 13 Bankruptcy offers homeowners a way to protect their homes and stop foreclosure lawsuits in their tracks.

When you file Chapter 13 Bankruptcy you receive the protection of the automatic stay. The automatic stops any creditor’s attempts to begin, continue, or complete a foreclosure lawsuit in state court. The automatic stay goes into place immediately after you file and will stop a court ordered sheriff’s sale from proceeding. The automatic stay allows you to breathe easier knowing that your house will not be lost on the courthouse steps.

Chapter 13 offers many benefits that allow you use your income to repay some or all of your debt. You may also have the benefit of paying your unsecured creditors back a reduced amount that is based on your income. Your bankruptcy attorney will propose a Chapter 13 Plan that allows you to pay back your past-due mortgage payments and penalties over the course of 36 to 60 months depending on your income. You are still responsible for making your standard monthly mortgage payment in addition to your new additional Plan payment, but your back payments are spread out over the course of the Plan to make them affordable.

Chapter 13 can be beneficial for you if you have a 2nd mortgage that is not secured against your property because your house is worth less than the balance of your first mortgage. An example is if your 1st mortgage is $100,000 and you have a 2nd mortgage or home equity line of credit for $20,000, and your house is only worth $85,000, you may be able to ‘strip’ off the 2nd mortgage and only pay back a percentage of the amount owed on the 2nd mortgage. At the end of your Chapter 13 your 2nd mortgage is eliminated and you will only owe the balance on your 1st mortgage. Please consult your bankruptcy attorney to see if you would qualify.

If you successfully complete your Chapter 13 by making all of your plan payments, you debt will be discharged and your mortgage payments will be deemed current. From this time on you can continue to make your normal monthly payments until your mortgage is paid off. You will also have your other eligible debts discharged as well. Chapter 13 is a great vehicle for eligible homeowners to use to save their homes and reduce their debt. Contact Finney Law Firm today for a free consultation to see if Chapter 13 bankruptcy is the right option for you.

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