The recession has been hard on many families throughout America. The job market continues to struggle, costs are increasing, and many people own homes worth far less than their mortgage. As a result, Americans are turning to bankruptcy to mend their financial situation.
Utah’s bankruptcy law allows individuals or joint filers to exempt particular assets up to a certain amount, and one of the most important assets available for exemption is a homestead. This prevents banks – if only for a little while – from repossessing a borrowers’ property.
Trouble for Lending Institutions Too
This recession has put pressure on banks and other lending institutions as well. According to the LA Times,banks and other lenders are now under increased scrutiny for their foreclosure processes. This scrutiny has driven down the pace at which lenders are able to repossess property, leading to a reprieve for troubled borrowers.
Foreclosure Rate Improvements
According to RealtyTrac, 2,474 Utah homes were owned by lending institutions at one point in 2009. Additionally, over 3,000 other homes had received, or were set to receive, a notice of default from their lender.
However, the LA Times reports that U.S. foreclosure activity dropped in April 2011 for the seventh consecutive month, and was at its lowest point since mid-2008.
Consumer Protections to Avoid Foreclosure
The increased paperwork required to complete these actions, as well as added pressure on lending institutions to modify loans or offer short sales have been major factors contributing to this slowdown.
Additionally, new consumer protection laws have been passed in many states, allowing attorneys to successfully challenge actions by banks.
To better understand their rights and the foreclosure process, borrowers are encouraged to contact an experienced foreclosure attorney as soon as possible. Waiting to dispute an action by a lender can prove costly as this is a very time sensitive process.