Jacksonville Bankruptcy Lawyer Blog
During the prime years of the housing boom (i.e., before 2007), many people took out a second mortgage. Some were using the cash from these mortgages to pay for things like tuition or medical bills, while others were buying vacations and new cars. No matter what these homeowners used the cash for, many of them now have something in common: 38% of borrowers with more than one mortgage are now underwater on their loans.
This is largely due to the enormous loss of equity that resulted from the housing crises that has rocked the economy for the past two years. Home prices have fallen 34% since the height of the housing bubble in 2006, which not only has an enormous weight on the recovering economy, but negatively affects underwater homeowners’ abilities to secure lines of credit.
Overall, there are about 10.9 million homeowners currently underwater. This is down from 11.1 million in 2010, but this is due primarily to completed foreclosures. Fortunately, there is a way to eliminate certain second mortgages; however, it requires filing bankruptcy to do so. In what is referred to as “lien stripping”, a Chapter 13 Bankruptcy can allow you to “strip” away additional mortgages (or possibly other liens) if your home is worth less than your primary mortgage. Though it requires filing bankruptcy, this may make sense in many situations. Will a Bankruptcy help you? We can help you analyze whether there would be a benefit. Alternatively, if you are not interested in filing bankruptcy or are otherwise facing foreclosure, you should contact a Jacksonville Foreclosure Defense Lawyer.