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HAMP May Actually Have Hampered Homeowners Needing Help

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HAMP was designed to help homeowners facing foreclosure and bankruptcy. The program has offered too little, too late.

For those that don’t know what the acronym HAMP means, it represents a program put together by President Obama, referred to as the “Home Affordable Modification Program.” It had good intentions, and was supposed to be designed to help close to 4 million householders facing bankruptcy and foreclosure. Unfortunately, good intentions are about all the program managed to deliver.

There is quite a bit of speculation over why the HAMP program failed, and most people lay the blame at the doorstep of the complicated qualifications people needed to meet. The target group it was supposed to help could not understand how to access the program.  Further, by offering a mere 10 percent reduction of principal, it was ultimately not worth attempting to use.

It looks like the program won’t have too much of an effect on bankruptcy filings, not that its original intention was to prevent bankruptcies. However, it was intended to help some homeowners keep their homes. While this program may have helped a few, the stark increase in filings over the last few years is dismal.

Foreclosures are virtually the number one reason people seek bankruptcy protection. If you are facing foreclosure but still happen to have a sustainable income, you just might qualify for HAMP. The advantages are tangible for homeowners who are still employed and have a high interest rate. HAMP has the ability to lower an interest rate by up to 2 percent, extend a mortgage term up to 40 years and waive interest charges on a certain portion of the principal. While this sounds good on the surface, the biggest glitch so far, is just being able to qualify for HAMP.

To qualify, you must be behind on your mortgage payments or be facing a risk of defaulting. You should have gotten your mortgage before January 1, 2009 and you must live in the mortgaged property. The principal balance should not be greater than $729,750 for a one-unit house. While this sounds easy enough on first glance, there are some loopholes that can backfire on the homeowner. For instance, if the owner is approved for a modification, they have a three month trial where their usual mortgage payment is made. Once they meet that requirement, the modification is to become permanent.

However, one large loophole in the program is that the lender gets to make the determination if the modification is permanent. Needless to say many homeowners have reported being put off by the bank or denied for a variety of reasons, typically leading to a legal battle; the last thing a stressed homeowner needs.

If you don’t have a sustainable income or enough money to face possible legal difficulties, this program may be a waste of time for you. If you are already in a bad financial situation, an added legal confrontation won’t help matters any. The best advice an Iowa bankruptcy lawyer may give you, with regard to HAMP, is try to avoid it and discuss your situation in detail with the lawyer. Bankruptcy isn’t easy, and the more complex it becomes, the more confusing things are for the person trying to get out from under a crushing debt load.

Kevin Ahrenholz is an Iowa bankruptcy lawyer and Iowa bankruptcy attorney. To contact him, visit http://www.iowachapter7.com or call 1.877.888.1766.

Posted on Monday, February 25th, 2013 and filed under News and Press | Comments Off on HAMP May Actually Have Hampered Homeowners Needing Help .
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Collections Must Cease on Implementation of Automatic Stay

Posted by: Admin User

When you file for bankruptcy, collections must halt. This is thanks to the automatic stay that kicks in when a debtor seeks bankruptcy protection.

While the bankruptcy itself is quite complex and complicated, there is no doubt about what an automatic stay means when bankruptcy protection is sought. Once you have filed, all of the creditors that you listed are told you have filed for bankruptcy via first class mail. This doesn’t mean the calls stop the day you file, as typically, it takes about seven-to-ten days before the phone calls will end completely.

If you do get calls from creditors, just give them the name and phone number of your Iowa bankruptcy lawyer. You may also want to provide creditors with your case number and ask that this information is noted on your file. If, for some reason or other, you are still getting phone calls and letters in the mail, call your lawyer and give him the creditor’s information. At this point, the attorney will send the creditor a “cease and desist” letter, which typically stops harassing creditors cold in their tracks.

It’s not unusual for creditors to still keep calling and sending mail, even at this point. If they do, they are in direct violation of your automatic stay and you need to contact your Iowa bankruptcy lawyer with a detailed log of all calls and letters. Your lawyer can then file stay violations against creditors who overstepped their bounds.

Filing for bankruptcy is not easy and the less stress you have to deal with, the better. You have a difficult journey ahead of you and many decisions to make about how to overcome your desperate financial situation. Some people feel enormous guilt over declaring bankruptcy, others feel it is their right and may have done it a time or two.

Declaring bankruptcy is not a shameful decision. It is often fueled by desperate necessity, by honest people who got into a financial bind and didn’t realize how dire their circumstances were until it was too late. The most common sense approach to declaring bankruptcy is to speak to an experienced Iowa bankruptcy lawyer and find out what Chapter may apply in your situation. Chapter 7 is not for everyone. Chapter 13 isn’t for everyone, either. It depends on the circumstances of your case.

Just because your friend or neighbor may have declared bankruptcy does not mean their case was the same as yours. No two cases are alike in detail. However, they are alike in the way they are processed by the bankruptcy court. This is not something that an individual should try without the help of a skilled bankruptcy lawyer. There is too much at stake.

Kevin Ahrenholz is an Iowa bankruptcy lawyer and Iowa bankruptcy attorney. To contact him, visit http://www.iowachapter7.com or call 1.877.888.1766.

Posted on Friday, February 15th, 2013 and filed under News and Press | Comments Off on Collections Must Cease on Implementation of Automatic Stay .
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