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23

Mar 2020

Many Foreclosures Get a Virus Hold

Posted by / in Blog, Weekly Posts /

The Federal Government is Pausing Foreclosures on Mortgages They Control.

Last week the Federal Housing Finance Agency announced a 60 day pause on foreclosures on mortgage loans the government controls. Those are mortgage loans controlled by Fannie Mae or Freddie Mac.  (Fannie and Freddie were government backed, private businesses. The government bailed them out during the housing crisis in 2008, and they are still pretty much government run.)

Are you wondering if this applies to your mortgage?

Both Freddie and Fannie have websites where you can see if they own your loan.

Here’s the Freddie lookup.

Here’s the lookup for Fannie.  

Foreclosure notice

In March, the government announced a 60 day foreclosure pause, on mortgages the government controls.

Does this apply to any other loans? FHA and VA

The 60 pause also applies to loans backed by the FHA–Federal Housing administration. There doesn’t seem to be any one place you can look up whether your loan is an FHA loan.  I sometimes see it on some credit reports. (Sometime’s isn’t much help.) Your closing papers when you financed the house are supposed to show that somewhere. And I guess you can call your mortgage servicer and ask.

The 60 pause also applies to loans backed by the VA.

 

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15

Mar 2020

Virus update–March trustee hearings cancelled

Posted by / in Blog, Weekly Posts /

Virus update–March trustee hearings cancelled.

No rescheduling plan has been announced yet. (Will there be a call-in plan instead??)

The Judges here in the Alexandria VA bankruptcy court have invited the lawyers to a conference call on Wednesday. We may know more after that.

Bankruptcy trustee hearings are at 1376 Duke Street

This is a picture of 1376 Duke St. Trustee hearings, which are held here, are suspended through March.

This announcement applies only to the trustee hearings.  Those are the ones that take place at 1725 Duke Street.  The court hearings, at 200 S Washington Street–those are still on.

 

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12

Mar 2020

After Bankruptcy, OneMain Offers Car Reaffirmation Negotiation

Posted by / in After Bankruptcy, Blog /

In the last few months, OneMain has been contacting me about reaffirmation negotiation on car loans.

That took me by surprise.

With the exception of Ford Credit, I’ve been strongly opposed to reaffirming cars.  Usually you can keep the car without reaffirming. and then give it back when your credit improves. I explain more about that, here. 

Car reaffirmation take it or leave it

Most car reaffirmations come to me on original terms, full balance, take it or leave it. OneMain is NOT doing that.

OneMain figured out that they don’t want you to give them the car back when your credit improves, so they are offering you a better deal now. Up ’til now, I had never seen a car finance company really offer car reaffirmation negotiation. They wanted people to reaffirm the entire balance at the current interest rate on a take it or leave it basis. 

But OneMain has come through with real balance and interest reductions. Taking a terrible loan and making it pretty good. If that’s on a car that you have been taking good care of–and been lucky to avoid problems with–then that makes sense.

Basically, here’s how this works. Get an accurate value on your car. Kelly Blue Book is one place. (Carmax offers on line, here.) We need to email OneMain, at this email cbp@omf.com, with the Blue Book value and say we’re willing to reaffirm based on that value at 6.0%.  

OneMain then will send back a reaffirmation on that basis. At least a lot of the time. (Sometimes I’ve seen them add a little.)

PS  I need to apologize to one of my clients last year, Kandy. Kandy believed OneMain’s offer when I thought it was just more smoke and mirrors. She was right and I was wrong. OneMain does seem to genuinely be willing to work out a new deal for you to keep the car.  This is my apology, Kandy.

 

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31

Jan 2020

Bankruptcy Solves Rod’s Security Clearance Problem

Posted by / in Blog, Weekly Posts /

Two weeks after filing bankruptcy, Rod got his security clearance.

Rod contacted me from a military base in the Midwest. The military wanted to give him a new assignment, in the DC area, with more responsibility. His wife and children had already rented a place and moved, while he was awaiting orders.

 

At the last minute, he couldn’t go.

 

Rod’s credit had gotten messed up with a repossession and he couldn’t get cleared to take his new assignment. So, he called me.

 

File bankruptcy to clear car repossession and get security clearance.

Rod’s credit had gotten messed up with a car repossession. So he could get his security clearance.

His chain of command told him he needed to file bankruptcy right away.

 

We got the papers signed and sent into the court within a week.

 

Five weeks later we met at his bankruptcy hearing. Rod told me he had been cleared to take the new job three days after his bankruptcy was filed. He was on the job in two weeks. Life was great.

 

Have you heard filing bankruptcy is bad for your security clearance?

 

Many people still believe that filing bankruptcy will damage your security clearance. (I talked to one just last week.)

 

Rod’s experience shows the opposite.

 

Now for sure, the best thing is to never get into financial trouble. But if you do, the military wants you to clear it up. NOT cover it up.

 

The chain of command really wanted Rod in that job. But they couldn’t get him cleared until he cleaned up his credit. Bankruptcy cleaned up his credit.

 

(Careful readers may have three questions. First, was Rod eligible to file in Virginia? Rod had signed a lease three months before, and had moved his family. I said Rod became a resident when he signed the lease. And nobody had any reason to question it. Second, did I have Rod sign the papers without ever meeting him in person? Yes I did. That’s strongly discouraged, but since he was away on military assignment, I decided in this case it would be OK. And I was careful to get enough ID I was sure I knew who I was talking to. Third, is this typical? No. I’ve NEVER heard of a security clearance problem being fixed in three days. Obviously the chain of command really wanted Rod available for this job.)

 

 

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30

Jan 2020

Right After Bankruptcy, Carla Signed on a Car Loan

Posted by / in After Bankruptcy, Weekly Posts /

Right After Bankruptcy, Carla Signed on a Car Loan and She’s Probably Gonna Lose Her House

I tell people please please please, do not get a car loan until at least two years after your Chapter 7 bankruptcy.

 

Two years after bankruptcy, I’m seeing people get car loans in the 6%-8% range. Three years in the 2%-4% range.

 

So please please please do NOT tie yourself to a 24% car loan right after filing bankruptcy. Here’s a true story that tell you why not.

 

after bankruptcy car loan

Please please please do not tie yourself to a 24% car loan right after bankruptcy.

Carla filed bankruptcy with me in 2014. Six months later, she co-signed on a car loan for her sister. The loan was financed by Credit Acceptance, at 24% interest. 

 

After a year, the sister stopped paying. Carla paid for a while, but when she stopped, or course that car got repossessed January 2017.

 

Fast forward to 2019. Credit Acceptance gets a judgment for $8600, attaches that Judgment to Carla’s house, and puts a garnishment on her pay check.

 

Carla is stuck. She can’t afford the house payment while being garnished. It’s too soon to file Chapter 7 bankruptcy, again. And if she could, the equity she’s built up since 2014 means the bankruptcy court would take and sell her house. And while she’s eligible for a Chapter 13 bankruptcy payment plan, she can’t afford that payment, either. (Under Virginia law, with terrible equity protection for single people, her Chapter 13 would have to pay all her debts in full.)

 

Two mistakes. First co-signing for someone whose credit was worse that hers!! Second, letting the dealer arrange financing at a terrible rate.

 

If you have to finance a car shortly after bankruptcy, shop for the car loan, before you shop for the car.

While it’s especially important right after bankruptcy, that’s always good advice. Shop for the car loan, before you shop for the car. (Unless the factory is having trouble selling their cars, dealer financing will always be more expensive than the best loan you can get for yourself.)

 

Sometimes, some people have no choice. They have to finance a car just a few months after bankruptcy. If you really have to, here are some of the places you can look.

 

722 Redemption Funding. These people are in the business of car loans immediately after bankruptcy is filed. they will put you in a bad loan; but probably a much better loan than the horrible loan a car dealer would recommend.

Bankruptcydrive.com is a new company that contacted me recently. I don’t know much about them.

Tower Federal Credit Union. Tower is the largest credit union in Maryland, and they make car loans to people in Virginia. I’ve seen them make loans to people right after bankruptcy that were better than I expected.

 

I’m not recommending any of these three. What I recommend is getting at least two years after your bankruptcy discharge before you finance a car. But if for some reason you can’t wait, shop for the loan before you shop for the car. And shop at least three places: try to get the best bad deal you can get.  

 

 

 

 

 

 

 

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NORTHERN VIRGINIA BANKRUPTCY LAW OFFICES