There Are Solutions For ARMs in Bankruptcy

Filing Chapter 13 will stop foreclosures but it won’t stop ARMs from adjusting or allow changes to Mortgages secured by Real Estate.  Simply put, the Bankruptcy Courts can not change or modify the terms of your agreement with your lender, lower your balance or lower your interest rate.   Mortgage Lenders have been reluctant to modify terms for fear that they may face lawsuits from their investors.  A huge problem looms over our economy with an expected 2.3 Million SubPrime ARMs expected to adjust in 2008 causing mortgage payments to go up, usually, by hundreds of dollars.  What’s worse, many of these ARMs will continue to go up every 6 months after the teaser phase (the fixed portion of the loan terms) has passed. Fortunately their are financial solutions available.  It is possible to refinance your Adjustable Rate Mortgage while in Bankruptcy.  It does not matter if your ARM has previously adjusted.   I would, however take into consideration the timeliness of attempting to refinance an Adjustable Rate Mortgage while in BK.  Whenever possible try to be proactive in your approach to dealing with amortgage that can potentially adjust in the near future or that has possibly already adjusted.  As always if you have questions, comments or concerns feel free to post a response here or click here to Talk With Steph.

Professionally yours,