(Serving Los Angeles and Kern Counties)
45074 10th Street West, Suite 103
Lancaster, CA 93534
Phone: (800) 958-6760
Available 24/7/365 by phone
Monday – Friday: 8:30am – 7:00pm
Saturday: 9:00am – 5:00pm
Lancaster Bankruptcy Attorney
One of the hardest hit areas of our practice is the Antelope Valley. Our clients there are no stranger to the economic recession that we’ve all been so familiar with the last few years. They were hit especially hard by the plummeting property values and the widespread unemployment. The Antelope Valley experienced some of the biggest growth during the real estate boom. As a result, the types of loans in that area were commonly the problematic adjustable loans, loans that counted on real estate prices to continue to boom. When the market dropped off, many of our clients found themselves with properties encumbered by two mortgages, two loans that were taken out when the clients bought their home. When the prices plummeted, often the mortgages were no longer affordable or maybe it simply didn’t make sense to pay so much for a home that was no longer worth what our clients had signed onto paying. We always stress that there are several options for those affected this way.
The first option is to surrender the home. Clients are always worried about whether they will owe the difference between what the home sells for and the mortgage. This fear keeps many in their homes. They are familiar with the process of vehicle repossession and fear that a foreclosure works the same way. If someone owes four hundred thousand dollars on a home worth two hundred thousand, they are not going to have to pay the bank the balance if the home goes into foreclosure. There are very rare circumstances where they would, but it’s very very rare and it would be very clear. That’s because California has laws that protect from this exact scenario. If the loans were purchase money, meaning if the loans were taken out when the home was purchased in order to purchase the home, then the bank cannot come after the client in order to satisfy the difference. Also, California has what’s called the “one-action” rule meaning that if the bank forecloses, that’s the one action they are allowed to take. Of course, there are several nuances to these rules and so, it’s best to consult an attorney, but walking away from the home might be less of a dismal scenario than previously thought.
Another way to assuage concerns for our clients is to remind them of the possibility of a short sale. Often short sales are less of a mark on the credit and can signify intent to work with the lender. Additionally, a lot of the issues that marked short sales in the past have been removed by temporary legislation. Lastly, short sales often require no money down by the homeowner and brokers are often paid by the bank.
Another option is to strip off a problematic second in a Chapter 13 bankruptcy. Antelope Valley clients actually have to go to the Los Angeles courts (as opposed to San Fernando Valley years ago) where there are two main methods for stripping off a second lien, depending on the judge. We’ve talked about this in other areas of the website so no need for detail.
The long and short of it is that, we really understand how hard the Antelope Valley was hit by the decrease in property values. There are several options and a ton of new legislation that can help you either keep your home or make the decision to leave it. Call our office (located at 10 Street West and Jackman) and we can help you make the right decision.