Mortgage Triage

I’m beginning to feel like a financial triage nurse rather than a bankruptcy law specialist. I sort through a client’s mortgages and decide which properties live and which properties die.

The best advice I had for a couple I saw yesterday was stop making payments on your miserable loan and live there payment free ’til the foreclosure. The debt equaled the value of the property, payments at the negatively amortized option were 2/3 of their gross monthly income, and the only changes coming were bad ones.

Foreclosure in California, from the start of the legal process to foreclosure sale, takes about 4 months in a perfectly efficient world. Add to that the 2 to 6 months of default before the formal Notice of Default and you have a significant period of time in which you can live payment free. Save the money you aren’t spending on bad mortgages, was the crux of my legal advice.

Not much fun delivering such advice.