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Our current financial crisis, brought on by the collapse of the housing market has more and more people looking for solutions to their “under water” property. An “under water” property is one in which the debt on the property is greater than the value. Today, millions of homeowner are now upside-down or “under water” on their home mortgage and they are looking for a way out.

Because of drops in value as much as 40 – 50%, the solution for many homeowners is to simply walk away without ever exploring ways to save their home. There are, however, options. They include loan modifications of reduced interest and principal as well as the possibility of buying or cashing out, at great discounts, lenders who would rather have cash than take over an underwater property.

A solution that is not given enough attention, is the possibility of lien stripping a second trust deed through Chapter 13 bankruptcy. Today, if you own real estate with a second or third mortgage, chances are you can remove that lien in a Chapter 13 bankruptcy case. This is because with real estate declining as much as it has, many second mortgages may be considered unsecured and will be treated as such in Chapter 13.

Chapter 13 bankruptcy, which is plan of debt repayment over time, permits liens to be stripped off of the debtor’s assets when there is not enough equity in the asset, after deducting senior liens from current market value, to secure the junior lien.

Section 506 of the Bankruptcy Code provides that a lien is only secured to the extent there is value in the asset to which it attaches. If a claim exceeds the value of the collateral, that portion of the claim is considered unsecured. As a result, in Chapter 11 or Chapter 13, even voluntary liens like mortgages and trust deeds can be stripped down to the value of the collateral.

A significant wrinkle exists, however, which greatly limits the ability of a debtor to strip off or wipe out his or her second mortgage or trust deed. As presently enacted, the bankruptcy code prohibits the stripping of liens that are “secured only by a security interest in real property that is the debtor’s principal residence” 11 U.S.C. 1322 (b) (2)

The effect of this limitation, in many states, is to completely eliminate the possibility of a lien strip on residential real property that is the principal residence of the debtor. By its very language, however, residential property that is held for investment and not as a “principal residence” may be lien stripped.

Court decisions throughout the country have also uniformly held that when the debtor has given other collateral, in addition to the personal residence, as security for the mortgage, lien stripping will be allowed. Thus, if the second trust deed is secured both by a debtor’s residence and other collateral owned by the debtor, be it another piece of real property or even something as simple as household goods, then lien stripping a second mortgage is permitted.

Finally, in many of the federal circuits, including the 9th Circuit which encompasses the state of California, bankruptcy courts have held that in those cases where the senior lien equals or exceeds the market value of the residence, the second lien is unsecured and may be stripped. This is because, according to the judicial interpretation of these circuits, a completely unsecured lien does not fall within the specific limitations set forth in 11 U.S.C. 1322 (b) (2).

Because the real estate market in California is in such a state of distress, in many cases even the first trust deed has a face value in excess of the market value of the real property. In California and in the other federal circuits which follow this rule, where the value of the property is less than the amount due on the first, a second or other junior lien may be stripped off even a personal residence.

Before you make the final decision to surrender your real property back to the bank, consider consulting with an experienced bankruptcy attorney and discuss with him the possibility of lien stripping your second and other junior mortgages. You just might be able to keep that house of yours without that second mortgage.

Want to find out more about bankruptcy, real estate and foreclosure, then visit Mitchell Sussman’s site and learn more about Chapter 7 and Chapter 13 Bankruptcy.

Our lives would not have been the same without the mortgage industry. Whenever we need finances for construction of home or any other building , we seek help from this sector. Mortgage funds are important funding source because mostly people don’t that enough money to spend on buying or construction of property.

Mortgage interest rates or mortgage rates are important because they determine the interest of the consumer in a mortgage offer. This can simply be defined as a financial charge for use of the lender’s money. Higher mortgage rates usually translate into an underdeveloped mortgage sector. Mortgage loans have an interest rate that represents the risk of the lender. The mortgage has a schedule for amortization for a period of time.

The mortgage rates are subject to fluctuations all the time. There is no particular set rate for the year. Instead it moves up and down. Determining the best and current mortgage rate is the most important task to be undertaken by a borrower. And it sometimes becomes very difficult to do in real life because not everyone is good with mathematics and stuff.

However, following some guidelines it becomes easy to find the best mortgage rate. First of all, a good part to start with is comparing the current rate to the past rates. You will be able to determine whether the rate has shown a historic trend of going upwards or downwards. Thus you will be able to pick a good mortgage rate by taking the lowest possible percentage.

A lot of fluctuations are seen in the mortgage rates. Lenders are attracted towards this sector when the term lengths are lower. Whereas borrower have to wait for the right time before they make na impact..

Various banks have different mortgage loan offers and it is important to decide after making a comparison between all the offers. Pros and cons exist for all these offers. It is thus important to compare the terms and conditions and the interest rates of each of the lenders to that you get the best possible deal at the end.

Such comparisons between the lenders have also become easier with the help of internet. Every lender has a portfolio over the internet and common people can access all information through it without physically visiting the place. Comparison facility is also available at certain special websites. This gives am instant comparison between the lenders and the mortgage rates. Real people post their reviews on such sites and thus it becomes a case of your own judgment.

Professional advice can also be taken for a mortgage offer if necessary. For some people it is quiet difficult to understand the past trends and also the terms and conditions. The market trends are easier to understand with the help of an advisor who understands your needs.

Looking for current mortgage rates ? Then your wait is over with the help of Best Mortgage Rates