Leave Feedback

The Bankruptcy Option

Register • Dec 2, 2013 at 12:38 PM

Herm’s Story


    Several days ago we met with Herm, who had an interesting mortgage story to tell.  He had just been sued for foreclosure by Fannie Mae, which is essentially a government-owned entity.  His mortgage problems began with his wife’s recent passing after a long bout with cancer, leaving him unable to keep up his mortgage payments based on his social security and monthly retirement benefits alone.  Even though it was immediately obvious that there were several mortgage relief programs available to Herm, programs which would allow him to stay in his home through his retirement years, neither his Bank (actually a loan servicer), nor his loan’s owner, Fannie Mae, reached out to him to offer, or even inform him of his options.

    Herm indicated that he had sought the advice of bankruptcy counsel who suggested he simply file a bankruptcy and walk-away from his home.  Unfortunately, that lawyer did not advise Herm that he had alternatives, options which could lead to him resolving his mortgage issues and staying in his home.  Unfortunately, Herm’s case is not the first we’ve seen where a homeowner with a troubled mortgage was advised just to simply wash the mortgage away in bankruptcy and forfeit his or her home to the bank, when home retention options were available.  Certainly, this is not to say that bankruptcy is never the best option for a distressed homeowner.  However, Herm’s case is a vivid reminder that every homeowner with mortgage issues should check out all alternatives available before choosing the bankruptcy option.


Note from the author: If you have questions or comments- regarding this or any Foreclosure Story article, please visit www.mcgookeylaw.com or visit us on Facebook.

Kate Eyster and Lauren McGookey contributed to this article.

Copyright 2013 Daniel L. McGookey 

Recommended for You