Lancaster Investment Property Foreclosure Lawyers
Clients with investment property have unique legal needs when finances get tight. At Wadhwani & Shanfeld, we work with clients to analyze all their potential options, including bankruptcy. The fact is that investment property is often vulnerable to loss, either through foreclosure or through the bankruptcy process. Still, there are legal strategies we can use to buy you time and increase the chances of keeping your hard-earned investments. Call our law firm to talk with a Lancaster investment property foreclosure lawyer today in a confidential setting.
Your Options when Finances Are Tight
Many people purchase investment properties like apartment buildings by taking out a loan. When they can no longer make payments, the lender initiates the foreclosure process, and you are at risk of losing the building.
Fortunately, you have some options you can pursue with a member of our legal team:
- Loan modification. Working with your lender, we can modify terms of the loan to make it more affordable given your reduced cash flow. Modification could reduce the monthly payment by extending the term or reducing the mortgage rate.
- Forbearance agreement. Your lender might agree to temporarily reduce or even suspend monthly payments for a certain amount of time, halting the foreclosure. Extra payments are then added to the back of the mortgage.
- Short sale. You sell the property for less than you owe, but your lender agrees to release the lien in exchange for the proceeds. When handled properly, a short sale can get you out of a mortgage that’s not working for you.
You might also consider bankruptcy as an option. Filing for bankruptcy protection results in an automatic stay going into effect, which immediately stops any foreclosure—at least temporarily. If you need a short amount of time to get financing in order or pursue a modification, then a brief stay could prevent the loss of your property.
The challenge with bankruptcy is that you will lose non-exempt property in a Chapter 7, and any real estate of significant size is probably not protected. In a Chapter 13, you can avoid losing property, so this might be an option. But you need to use disposable income to pay creditors an amount equal to your non-exempt property. In other words, you are paying for the exemption over the life of the payment plan.
Essentially, if your real estate is worth $200,000 and not exempt, you would need to pay this amount over 3-5 years, at a minimum. That might not be feasible, depending on your cash flow and financial prospects.
One benefit of bankruptcy, however, is the cramdown feature. This allows you to reduce your loan if the value of the investment property has fallen below what you owe. Still, there are conditions that come with the cramdown option.
Helping Thousands of Investors
The lawyers at Wadhwani & Shanfeld have helped thousands of people deal with debt. To discuss all the options listed above with a Lancaster investment property and foreclosure attorney, call us or reach out online.