In Chicago, Illinois, several struggling homeowners who are facing foreclosures or bankruptcies have staged a protest in front of the office of Todd Stroger, president of Cook County Board, to demand for money to support programs that will help alleviate the problem of foreclosures.

The protest was also attended by almost 40 members of the Action Now. According to members of the Action Now, there was no county budget allocation for foreclosure court mediation and counseling. Participants said that distressed homeowners need court mediation because they do not know who to turn to for help in saving their properties from foreclosures.

According to a market study, as many as 86 percent of people who lost their properties to foreclosures in 2008 do not have legal representation. Industry experts said that there is a great need for legal counsel. They said that many distressed homeowners do not have knowledge on how to present a legal claim or file a bankruptcy.

Meanwhile, experts predict that about 53,000 homeowners will receive foreclosure filings in Chicago before the end of this year. However, they said that many of these foreclosures could be prevented if only homeowners could have easy access to legal services. They urged Stroger to use a portion of the total repossession filing fees to financially support preventive measures.

On the other hand, an Action Now member said that majority of troubled homeowners could have saved their properties if they could have access to court mediation. Legal advice is also needed by homeowners who plan to file for Chapter 13 bankruptcy. This type of bankruptcy would allow borrowers to meet with their creditors and discuss a payment arrangement or plan that will allow them to pay back their debt.

Industry experts said that no matter what distressed homeowners decided for themselves, whether to fight foreclosures or go for bankruptcies, they need legal representation to get them through the whole complex process.

But since the inception of the program early this year, it failed to meet its target number of modifications. The major complaint of many distressed homeowners is the lengthy process. Some of them even complained that by the time any response has been made by lenders on their modification request, it is too late for them to save their properties from becoming foreclosure or bankruptcy houses.

At a meeting on the effectiveness of the Home Affordable Modification Program (HAMP) of the government, conducted in Philadelphia, Pennsylvania, officials of Freddie Mac, Fannie Mae and Treasury who are responsible for the program gave it an average progress rate.

According to industry experts, the federal program has some deficiencies that makes it ineffective for a great number of unemployed, struggling homeowners. Also alluded during the meeting are the structural problems of the federal program.

Struggling homeowners who applied for loan modifications which would give them 31 percent debt-to-income rate, said that the process usually takes about 3 months to complete. This is in contrast to what lenders would normally say, that the loan modification process takes only 2 and half months to complete.

Industry experts said that debt-to-income rate is not properly calculated by the support staff of many lenders. The Treasury has issued loan modification guidelines but industry experts doubt if they are binding to all servicers.

Experts believed that borrowers opted to have self-imposed delays for the reason that many of them do not know how to go through with the loan modification process, they do not know how to budget or even why they are in financial trouble and facing foreclosures.

They said that many applicants do not have the necessary skills to produce the required financial documents and necessary information. Under HAMP, the goal is to reduce the mortgage payment to just 31 percent of the monthly gross income of the borrower.

Some homeowners complained that their lenders did not apply their mortgage loans on the calculation of their debt-to-income. They believed that many loan modification applications were rejected due to incorrect calculation of debt-to-income rate, resulting to more foreclosure and bankruptcy houses.

By doing so, the distressed mortgage companies might have the chance to turn such non – performing loans and change them into performing assets. This will, most likely, minimize the losses incurred due to foreclosure. To accomplish this, the companies will have to modify the terms of the mortgages and ease some of their policies, in order to make it easier for the troubled borrowers to meet their obligations.

Many lawmakers have already pressed mortgage lenders to work with the borrowers by adjusting the mortgage loan terms and consequently, reduce balances. By doing so, they will be doing the whole nation a great favor.

Considering that Fannie Mae and Freddie Mac own almost 50 percent of the total residential mortgages – roughly amounting to $12 trillion, they can actually direct mortgage servicers to stop any foreclosure proceeding. For this reason, the Committee members strongly believe that these two federal agencies have the means to minimize the impact of the foreclosure crisis on the entire nation, particularly on the taxpayers.

Across the nation, millions of homeowners facing foreclosure are attempting to work out their mortgage problems with their lenders. Some of them are being assisted by foreclosure counselors who act as mediators. A growing number of defaulted loans have already been modified, allowing the homeowner to stay on their homes.

Many housing advocates have urged distressed homeowners to sit down with their lenders and discuss possible solutions so that both parties can avoid foreclosure. These options include repayment plan, loan modification, short sale, deed in lieu of foreclosure and in some cases, a bankruptcy.

Simply put a judgment lien is a claim against a property that comes with an Abstract of Judgment. This judgment has been issued by the court so that the creditor can finally collect. The only way this particular lien can be satisfied is when the creditor will file and record a Satisfaction of Judgment.

If the distressed homeowner decided to refinance, the loan proceeds will be first used to satisfy the judgment lien. Lenders will usually require this as a condition of the loan.

On the other hand, if a buyer is purchasing a pre-foreclosure property with a judgment lien attached, it should be understood that the lien should be satisfied by the buyer in exchange for the Satisfaction of Judgment.

In order to convince the judgment creditor to agree, the buyer should emphasize the speedy transaction and easy payment. Most creditors agree with the buyer’s offer to satisfy the judgment lien since the lien could be lost in the event of foreclosure filing or bankruptcy.

For these reasons, foreclosure buyers and investors should not feel wary about buying repossessed homes with judgment liens. You will only need to negotiate with the creditor in order for the lien to be released.

Keep in mind that judgment liens usually expire after 10 years. If the lien is quite old, you should probably wait for the creditor to renew it first before making a move. But as an investor, you will have to take this lien into consideration when making a decision to buy a foreclosed property.

Declaring bankruptcy is sometimes the only way for consumers and citizens to seek legal protection from creditors seeking to collect money that citizens simply don’t have, and in Georgia, roughly 1 out of 60 homeowners has sought this protection.

However, this is nothing new. Georgia has historically had one of the higher bankruptcy rates in the nation, and has rarely fallen out of the top 5 states in this category. Experts say that this is because the state attracts a lot of young entrepreneurs who attempt to go into business for themselves, and of course, some fail. This, combined with the state’s laws that make it easy for creditors to go after their debts contributes annually to one of the higher rates of bankruptcy out there.

The recent trend in foreclosures has also had a huge impact on personal bankruptcies, and Georgia is currently 8th among states in terms of foreclosure rate. Laws in Georgia also make it easy for lenders to pursue a foreclosure on indebted homeowners relatively quickly, as most homes in foreclosure end up being sold off within 40 days.

These are all signs of how deeply the housing market recession is affecting the economy, and the personal lives of so many borrowers and homeowners. Since they cannot gain anything by selling off their properties on the open market, many homeowners in Georgia seek pre-foreclosure sales to investors to rid themselves of the foreclosure, and instances of pre-foreclosure sales have been growing in the area.

With more than 90,000 bankruptcies filed in March, the month held a rate that was 30% above the average pace of 2007. Bankruptcies have been linked to the upward trend in home foreclosures, as homeowners who cannot afford to keep up with the soaring interest rates of sub prime and adjustable rate mortgages often declare bankruptcy when faced with a significant default. The prime evidence for this comes in the fact that the three states with the highest rates of bankruptcies, Nevada, California and Florida are also the states with the highest rates of foreclosure.

The rising incidence of bankruptcies in these states indicates similar trends that the rise in foreclosures illustrate, namely that people are losing significant amounts of money on real estate investments due to the housing market fallout. In fact, California, Nevada and Florida are also states that were rampantly developed during the housing boom before the fallout, and many of the properties ending up at auction are new developments that investors were simply unable to sell. Interestingly, this means that there are a lot of newer properties on the foreclosure market, which is contributing to the growing trend among homebuyers to buy discount foreclosure and bankruptcy properties. The values offered by newly built, quality homes at discount prices are pretty much unparalleled in the current market.