A little known but increasingly popular provision of the bankruptcy code is being used by many struggling homeowners to eliminate second mortgages and avoid foreclosure.  Bankruptcy laws prevent homeowners from eliminating the debt of a first mortgage if they plan to stay in their home. But second mortgages are treated differently. They can be declared […]

Home values fell 3% in the first quarter from the previous quarter and 1.1% in March from the previous month.  Prices have now fallen for 57 consecutive months prompting many economists to push back their estimates of when the housing market will hit bottom.  Wall Street Journal May 9, 2011

Fourteen financial institutions must lay out their plans to clean up their mortgage servicing operations by mid-June.  Improvements will require a single point of contact, established deadlines to decide weather borrowers can get a loan workout and sufficient staffing to deal with the tidal wave of troubled loans.  Wall Street Journal April 29, 2011

Sales of previously owned homes rose slightly in March but prices continued to fall.  Distressed sales accounted for 40% of sales and all cash buyers made up 35% of all transactions.  Realtors say sellers must accept the reality of lower prices and stop waiting for the return of boom-era values. Wall Street Journal April 21, 2011

IRS policy to forgive debt owed on a short sale or foreclosure only applies in certain limited circumstances.  In all other situations the forgiven debt is treated as taxable income. CNNMoney.com 4/15/11