Strategic Foreclosures - 60 Minutes Report

A 60 Minutes report that aired on May 9, 2010 outlinging Strategic foreclosures.

Some of the facts that jumped out at me: 7 Million people are currently late on their mortgage, and 1 Million have ALREADY strategically foreclosed.

See story here.


Weitz: I've been concerned about this from the beginning of the credit crisis. Knowing the foreclosure laws that are in place in states like Arizona, California, and yes...Washington....many people will find it economically advantageous to simply walk away from their homes. That will, of course, make a bad problem worse, but its not illegal for homeowners to do just that. Thus, I except we are just in the infancy of this phenomenom (assuming real estate does not drastically improve).

Someday, State Legislatures may change this law to protect the banks, but that will likely just push people into bankruptcy to wipe away the debt and start over.

For more information on Foreclosure law in Washington, consider calling a Seattle Foreclosure Attorney.

Our Information:

Weitz Law Firm, PLLC
5400 Carillon Point
Kirkland, WA 98033
(425) 889-9300

Strategic Foreclosure - Immoral or Smart Business?

There was an interesting piece on Yahoo.com/finance regarding the ethical issues involved with walking away from your mortgage.

Click Link Here:

When making the decision to 'strategically default', you should consult a Washington Foreclosure Attorney, or an Attorney who does a lot of Foreclosure work in your State. The law varies State to State in regards to deficiency options, and the ability of the banks to pursue other assets.

Basics of Washington Law:

In Washington, the general rule is that the foreclosing party (Bank) cannot pursue a deficiency. The foreclosing party will simply be able to foreclose on the secured collateral. Washington does, however, allow the parties with Jr. Liens (ie. 2nd & 3rd mortgages)to the foreclosing party to seek a deficiency judgment. Accordingly, the decision to walk away should be well thought out based on the facts of your particular situation.

For more information, see a Seattle Foreclosure Attorney.

Our Firm:

Weitz Law Firm, PLLC
5400 Carillon Point
Building 5000, 4th Fl
Kirkland, WA 98033
T: (425) 889-9300

Short sales & Your Credit

Facts about Short Sales:

Effects of Short Sale on your Credit Report:• 200-300 point reduction on your FICO score, depending on the borrower.
• Inability to obtain a mortgage for at least 24 months.

Effects of late payments on Credit Report:• 30-60 day late payments: an “isolated occurence” (do not have 30-60 day late payments on multiple accounts) does not cause long term damage to your credit.
• 90-120+ day late payments: drop credit score for the long haul (around 7 years).

Effects of Collections (post Short Sale Deficiencies) & Debt Settlement• Credit score will suffer with both; with debt settlement, however, you’ll eventually repay your debt and thus helping to rebuild your credit score
• Do not simply leave your debt hanging with collections in hopes that they will charge off the loan. They will continue to report that you are in default of “installment payments,” etc. They can do this for years. It is better to settle your debt and move on. You especially do not want additional 90 day late payments reported as your credit score at that point will drop significantly.

For more information, feel free to contact us at (425) 889-9300 or @ ScottWeitz@weitzlawfirm.com.

For our website, please clink link for Short Sale Attorney in Kirkland.

Washington Deficiency Judgments Post-Foreclosure

One of the major components of deciding whether to stay in your home or simply walk away is whether you will owe in money should you decide to walk away. In Washington State, the foreclosing lender (typically your 1st mortgage) can not pursue a deficiency judgment except under rare circumstances (a judicial foreclosure - which is extremely rare). Unfortunately, all other mortgagees & lines of credit can pursue a deficiency, however, it is possible to wipe them out by filing a Ch. 7 Bankruptcy or Ch. 13 Bankruptcy.

In sum, if you have just one mortgage, you will be able to walk away from your mortgage without owing any money. If you have multiple mortgages, the decision process will be more complicated.

For information on Washington Foreclosure Laws, please consider seeing a Washington Foreclosure Specialist.

Our Firm:

Weitz Law Firm
Kirkland, WA 98033

(425) 889-9300

weitzlawfirm.com