In the News 06/02/2015

In a 9-0 decision on Monday, the United States Supreme Court (SCOTUS) ruled that underwater homeowners, or homeowners who owe more on their mortgage than their house is worth, cannot get rid of their second mortgage by filing for bankruptcy. All nine justices agreed that filing for Chapter 7 bankruptcy protection does not allow for canceling a second mortgage.

The original case involved two Florida homeowners who argued that a second mortgage is paid after the first and is essentially worthless after filing bankruptcy. However, SCOTUS sided with lenders who fought to keep the second mortgage liens, such as home-equity loans, citing the constant shift in the property market in their decision. The justices agreed that when the value of real estate changes, the second mortgage could be paid off in full.

For more information, visit http://www.wsj.com/articles/supreme-court-underwater-homeowners-cant-void-second-mortgages-in-bankruptcy-1433173699.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s