Bankruptcy

Are Lenders Lying to Home Owners Seeking to Renegotiate?

I can’t answer the question above, obviously, but it’s the only question that comes to mind after hearing from not one, but eight different colleagues across the country reporting the same sad story:

• Client faces foreclosure
• Client wisely begins investigating Chapter 13 as a solution
• Client gets phone call from lender - “Don’t fret, we’ve got it under control. There will be a new loan. We’ll work something out.”
• Client breathes easier.
• The day before foreclosure hearing or sale, Client gets antsy, having not heard from Lender. Lender says, “Oh. Gee. Sorry. Didn’t work out.” Or “here’s your new term” - and it’s substantially more than Client can afford. Or - you get the picture.

This is happening in many states, with many lenders. Are the foreclosure and forbearance departments just not communicating with each other? (That wouldn’t surprise me, actually.) Or is something more insidious going on here?

Your guess is as good as mine. But it’s my mission to make sure that homeowners facing foreclosure know this one simple fact:

Chapter 13 is a viable solution that will achieve your goals of managing your debt and keeping your home.

© 2007 SC Bankruptcy & Consumer Law Blog.