This blog post is brought to you by the letter “M.” I read a post earlier this month that got me thinking about how homeowners are going to manage their changing budgets when their mortgages adjust. This article, by Bill McBride (@calculatedrisk) explained that nearly 2 million mortgages that were modified are due to face interest rate resets. As I have had the pleasure of seeking loan modifications on behalf of my Chapter 13 clients, I generally see the modification agreements setting up a “step” system of interest rate and payment adjustments over the remaining loan’s terms. I wonder though, if these folks have planned in their budgets for these changes.
If you’ve already forgotten about the mortgage meltdown, here’s a book review provided by Adam Levitin (@creditslips) that provides a great synopsis of the history of mortgage deregulation and the financial crisis of 2008. It’s nice to see housing prices rising to save some underwater borrowers, as mentioned by Evan Nemeroff (@NatMortgageNews) in this article. Evans’ article points out that approximately 6.3 million home or 12.7% of all residential households owe more than their homes are worth.
Managing a personal mortgage meltdown when the household budget does not include the increased mortgage payment, may include a court ordered debt repayment plan through Chapter 13 of the Bankruptcy Code. There are options and speaking with a professional about debt relief options, including a bankruptcy lawyer can make all the difference to your financial future.