Written by Craig D. Robins, Esq.
If you have a Fannie Mae mortgage, are delinquent with your mortgage payments, and are headed towards losing your house in foreclosure, you may be able to get a temporary break. A new program entitled, “Deed for Lease” permits homeowners to transfer the deed to their house to Fannie Mae and sign a one-year lease. The program was just announced two days ago.
Why would Fannie Mae do this? The foreclosure process is usually lengthy and time-consuming. This program will permit families to stay in their homes (albeit for a limited period of time) and avoid the uncertainty of foreclosure.
However, the program is not for everyone. There is a detailed application process and you must be approved. Also, the program only applies only to Fannie Mae mortgages.
Is the “Deed for Lease” program better than filing bankruptcy or engaging in foreclosure defense? Only an experience bankruptcy attorney can really help answer that question. There pros and cons with all options. The “Deed for Lease” program means losing your home — for good. On the other hand, a Chapter 13 bankruptcy enables the homeowner to cure the mortgage arrears over time and keep the home.
The program also guarantees a minimum one-year rental period, which also calls for a monthly rental payment. However, defending a foreclosure proceeding (assuming that there is a reasonable foreclosure defense) can often provide the homeowner with an even longer period to stay in the home, during which time the homeowner does not make any rent, mortgage or real estate tax payment. In the program, you would have to pay “market rate” for rent, which could be fairly pricey. For a typical Long Island home, that could easily be $2,000 per month or more.
Finally, even if the program sounds good for you, there is no guarantee that you will be accepted into it, and the approval process can take some time — and all the while the mortgagee can continue a foreclosure proceeding.
Of course, if the bank takes back a deed in exchange for a lease, the homeowner is off the hook for any mortgage deficiency. However, keep in mind that a Chapter 7 bankruptcy filing in New York would discharge such a deficiency.
If you’ve already filed for bankruptcy, you are not eligible for the program.
How do I know if I have a Fannie Mae mortgage? Fannie Mae has a website that enables you to look up your property to see: [loanlookup.fanniemae.com]
What are the details of the “Deed for Lease” program?
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Written by Craig D. Robins, Esq.
If a trustee in a Chapter 7 case comes across a significant asset that is not exempt, the trustee will first solicit an offer from the debtor. If the debtor is interested in keeping the asset, then the debtor will negotiate to purchase the debtor’s interest.
What happens if the debtor is not interested or can’t afford to purchase the asset? Then the trustee will try to sell it.
In order to do so, the Chapter 7 trustee must give notice to all creditors and interested parties listed in the petition.
The trustee can then determine how the asset will be sold. It can be through a broker or an auctioneer. The trustee can also publish a notice indicating that the sale will be in his office, or that the item will be sold to the highest bid received by a certain date.
In order for the trustee to accept a bid, even if the only party making the offer is the debtor, the trustee must seek bankruptcy court approval. In some instances, the trustee will structure the sale so that it is subject to a higher or better offer.
Once the trustee sells the asset, then he has good amount of paperwork to do.
You may be interested in a related post I wrote: 
Written by Craig D. Robins, Esq.
Last week I wrote a post in which I said that 
Written by Craig D. Robins, Esq.
The simple answer is that all income of any kind must be disclosed in a bankruptcy filing. Some clients think that because they “work off the books” they don’t have to disclose that income. That’s certainly not the case. All income must be disclosed — no matter how it is received.
In addition to salary and earnings from employment, all other types of income must be disclosed as well. These include:
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BAPCPA Man Pokes Fun at the Poorly-Written Bankruptcy Amendments!
Written by Craig D. Robins, Esq.
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I am pleased to post antoher cartoon strip of 
Written by Craig D. Robins, Esq.
Everyone who files for personal bankruptcy must produce identification. You are not required to produce identification at the time of filing, but at the meeting of creditors which occurs one month later. However, any experienced bankruptcy attorney will want to see that ID from the outset.
The Office of the United States Trustee adopted a policy in 2002 in which individuals are required to identify themselves with picture identification (typically a driver’s license) and proof of correct Social Security number (typically a Social Security card).
However, other forms of proof are acceptable as well. According to
Written by Craig D. Robins, Esq.
The Chief Judge of New York, Jonathon Lippman, announced today that he will be providing all New York State judges with an allowance of $10,000 in addition to their regular salary. This is a welcome addition considering that this is the 11th straight year that New York judges have not gotten a pay raise. However, this does not apply to Bankruptcy judges.
Bankruptcy judges, who are federal employees, have not gotten significant pay raises for quite some time as well. The current salary for a bankruptcy judge is $160,080, and this amount is set by Congress. The salary is actually based on 92% of the salary of a United States District Court judge, which is currently $174,000.
Incidentally, New York State Court judges in the Supreme Court currently have a salary of $136,700, and County District Court judges earn slightly less than that.
Many of the Long Island bankruptcy attorneys appearing before Judges Robert E. Grossman, Alan S. Trust, and Dorothy T. Eisenberg in the Central Islip Bankruptcy Court therefore earn more than the judge.
Although a judge’s salary, when compared to the typical salary of a Long Island resident, may seem pretty good, it is relatively less than what the judge can earn in private practice. This is the main reason why former Chief Bankruptcy Judge Melanie S. Cyganowski retired from the bench two years ago. (See the my interview of her: 
Written by Craig D. Robins, Esq.
Last week I wrote about