Word to the Wise

Posted by kevin on October 3, 2011 under Foreclosure Blog | Comments are off for this article

In the last 8 months or so, there has been little activity on the foreclosure front.  The  NJ Supreme Court directive slowed down foreclosures and basically stopped sales.  However, most of the big lenders have now complied with the minimum standards required by the courts, and are now sanctioned to continue with the foreclosures.

The spigots are opening.  Notices are going out.  We can expect to see a large increase in filings.

However, when I speak with prospective clients, they are reluctant to retain counsel.  Cost of representation is now an issue.

Two things to consider:  first, once the process starts the sands of time are running out of the hour glass.  The longer you wait to hire counsel, the more expensive it will be, and the lesser your chances for a successful outcome.

Second, interest rates are at historic lows.  That means that if we can make a deal, it will be at low interest rates, like 2-4%.  But , the bubble is going to burst and inflation rates and interest rates will start to go up.  I have been doing a lot of reading on this subject and most of the pundits believe that the only reason rates are so low is because the Fed is pumping out money.  That will end.  When it does, interest rates will go up to 10% and higher.  That will kill you if you are still in an adjustable rate mortgage.  It will also kill you if you are trying to make a deal on a mod because the 2-3% deals will be gone.

Do yourself a favor.  If you are in default and thinking you are slick because you are not paying your mortgage and will be able to make a deal at 2% down the line, down the line is now.  Get competent representation and get your deal done now.  Otherwise, you may wind up doing what is anatomically impossible.