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Feb 2011

Before bankruptcy: Virginia law is fast track for foreclosure

Posted by / in Virginia Bankruptcy / 3 comments

Many people file bankruptcy right before foreclosure.  Sometimes the timing of the bankruptcy is to get more time to get a loan modification approved.  Sometimes the timing of the bankruptcy is to get more time to move.   Sometimes it’s because people are out of work and have no where they can go.

As a Virginia bankruptcy lawyer, I see a lot of that.  Because foreclosure is faster in Virginia than almost anywhere.  (And while other states are adding protection for homeowners, Virginia is not.  So reports the Washington Post.)

Now most people who are being foreclosed in Virginia are in fact behind on the mortgage payments.  And they do owe a payment to somebody.  But, it’s not always the company who is trying to foreclose them.

Just last week, I met with a couple filing bankruptcy on the eve of foreclosure.   They had letters in December from two different companies, both saying they owned the loan.

Does that matter? Well, some.  Now in this era of falling housing values, banks will consider loan modifications and work outs, rather than just foreclose.  But you can’t apply for a loan mod, if you don’t know who has your loan.

So, it’s no surprise that several members of the Virginia General Assembly have introduced bills to give homeowners more protection.  One of those was Del Bob Marshall from Manassas.

If anybody can get the attention of the General Assembly for a consumer bill, Del Marshall would be the one.  He’s a member of the majority party–a Republican.  He’s been there twenty years.  He’s a well known right-winger.  His bill has support from both parties.

Virginia Del. Bob Marshall introduces a foreclosure bill

Del Bob Marshall

(Del Marshall also said his bill would help the state collect a tax that the banks already owe and don’t pay. That was an appeal to law and order and fiscal conservative types.)

The General Assembly is in session right now.  Are they doing anything about this?  No so far.

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Robert Weed has helped fifteen thousand people file bankruptcy in Northern Virginia. Robert Weed is a frequent panelist and speaker at the meetings of the National Association of Consumer Bankruptcy Attorneys. He is one of Northern Virginia’s most experienced personal bankruptcy lawyers. As an expert on changing consumer bankruptcy laws, Robert Weed has been interviewed on local and national TV and quoted in newspapers across the country.

  • Robert Weed

    March 12, 2011, am31 9:52 AM

    Sadly, Del Marshall’s bill got no where in the Virginia General Assembly.

    By contrast, in the overwhelmingly conservative and Republican state of Arizona, the state Senate voted 28-2 to require foreclosing lenders to prove they actually own the loan. (Imagine that!) http://www.businessweek.com/news/2011-02-23/arizona-bill-would-void-foreclosures-without-full-title-history.html. This just goes to show how very, very anti-consumer the political system is in Virginia, compared to even other conservative states.

    • Holly

      May 27, 2013, am31 3:38 AM

      Well Mr. Weed I do agree how not right many things are in Virginia but it amazes me how people in general are. It used to be the case that all these FC people they just bit much more than they could ,until it became known after 4.5 million foreclosure and admission by the banksters that yes indeed it has been the fault of the banks and not the people.

      I have been in Bankruptcy since 2009 and not been discharged yet. My house got relief from stay and was foreclosed on.And not by the right lender,but they claimed it and I am fighting. how odd that I was not even behind with my mortgage.

      Banks just want to grab and run with it.

      • Robert Weed

        May 27, 2013, am31 11:28 AM


        I’ve got to agree…a lot of the crisis was caused by the “banksters.” Overwhelmed by greed, they believed they could make more money on bad loans than on good ones. So, they made loans to people who obviously could not pay. And then they sold those loans to investors, and collected their profits, before the bottom dropped out.

        Good luck fighting back. And thanks for sharing.

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