Legal Question in Real Estate Law in Georgia

Let me try and give you a few thoughts that may help --

1. You may absolutely approach your lender (or if you have a 1st and 2nd mortgage, you can approach both of your lenders) and attempt a loan modification whereby your monthly payments are reduced. Please keep in mind that it is typically not a quick process to get a final answer on your loan modification request -- there are lots of folks in your same position trying to do the same thing. The modification process is often frustrating too -- these lenders are so big that the right hand often times doesn't speak to the left, so you will receive multiple requests for documents you have already submitted, etc. If you go this road, my recommendation is to be as patient as possible and keep pushing, pushing, pushing to get answers. I would also have a lawyer review any documents the lender asks you to sign in conjunction with a modification or otherwise BEFORE you sign them.

2. A reverse mortgage (whereby the lender pays you the monthly mortgage amount in return for your agreement to deed the property to the lender upon your death) is only a possibility if you have a certain amount of equity in the home. With that said, it certainly wouldn't hurt to shop around and see if any reverse mortgage lenders might be willing to talk with you. If they are, hire a lawyer to review any documents they want you to sign BEFORE you sign them to make sure you are protected. If they are not willing to work with you, nothing lost.

3. A refi could certainly lower your payments, but you will need to have a certain amount of equity in your home and it's difficult to get re-fi'd if your home is underwater (you owe more on your mortgage than the fair market value of the home). Like the reverse mortgage, it doesn't hurt you to shop around for lenders willing to refi trouble cases -- it likely won't be a big lender (Wells Fargo, HSBC, Bank of America, etc.), but there are LOTS of small lenders out there may be willing to take risks. Again, if you find one, have a lawyer review the documents PRIOR to signing them to make sure you are protected.

4 As for bankruptcy, you will need to visit with a bankruptcy lawyer to determine whether that's a viable option for you. Most bankruptcy lawyers will give you a FREE CONSULTATION so that you can make that determination. If you have not been paying your mortgage and have been receiving letters from your lender threatening forclosure, and you want to stay in your home, you need to see a bankruptcy attorney IMMEDIATELY. Even if you have not been receiving foreclosure letters from your lender, but you are more than a month or two behind on your mortgage, you should go ahead and see the bankruptcy lawyer so you know your options. There are tons of bankruptcy lawyers listed in the yellow pages and online. Just so you know, if you declare bankruptcy PRIOR to foreclosure, often times you can stay in your home. If you wait to declare bankruptcy until after the foreclosure, you will not be entitled to stay in your home, so TIME IS OF THE ESSENCE HERE. You should also know that if you declare bankruptcy, that there are negative consequences for you -- you will not be able to keep all your assets (cars, boats, jewelry, cash, stocks/investments, 401k, savings, retirement, etc.) if you declare bankruptcy. The bankruptcy court will not allow you to hide behind bankruptcy and continue to live the same lifestyle when you have assets that could be sold to pay down your mortgage and/or any other creditors you may have that are seeking repayment of your debts. Additionally, if you earn income, you may lose all or a portion of it. The court will not put you in a position that you physically cannot eat and survive, but bankruptcy is not meant to be a pleasant thing or any "easy" out. Bankruptcy will also ding your credit pretty good for years, so the odds of you getting a loan to buy a new house (or anything else) even if you successfully make it out of bankruptcy will be low for years. If you are in retirement and are allowed to stay in your home, this may not be a big deal to you (as you won't be going out looking for a new house and a mortgage on it), but it will effect your ability to get a car loan or any other type of loan.

Hope this helps. The above is for informational purposes only and does not, nor is it intended to, establish an attorney-client relationship or any duty of confidentiality. ****BEST OF LUCK!*****

In any bankruptcy you must list you mortgage. If you file chapter 7, the mortgage is discharged. You may in some cases elect to pay it anyway (to keep the home). Bankruptcy does not change a first mortgage payment (in some cases it can wipe out a second mortgage), but a loan can be modified in or out of bankruptcy.

To determine what you should and should not do, you need to sit down with a lawyer. There are pros and cons to bankruptcy, and in some cases something else may be appropriate. If bankruptcy is appropriate there are different forms of bankruptcy. Feel free to call me to set up a consultation if you'd like to know more. 404-768-3509.