The Aftermath of 2005 – The Wild West Of Mortgage Lending

More and more, I am receiving calls from people who have marginal budgets but somehow managed to buy more than one property in 2005. Sometimes they have an ARM, an 80/20, and a non-paying tenant. Some exceed the Chapter 13 secured debt limits which are set too low for the New York region’s higher valued properties. Refinancing is unlikely: most have no equity and their LTV is way too high. Chapter 13’s with the surrender of property is becoming more common. Some have predatory lending claims that may be worth pursuing.

I have yet to see any new law, state or federal, that really helps these borrowers. For those who might benefit from 13, I usually schedule an office visit to review their budget and eligibility issues first. In some cases, I have been able to assist with a loan workout (forbearance agreement) also. It’s a tough situation for many but there are still options and solutions. Just not as many as there were in 05′.