Los Angeles Bankruptcy Filing Increase as Foreclosures Rise

Los Angles Bankruptcy Attorney – As Los Angles area bankruptcy and foreclosures sky rocket, the Bush administration and Congress are considering new proposals for the government to rescue hundreds of thousands of homeowners whose mortgages are higher than the value of their houses.

Los Angles Bankruptcy Attorneys have noticed many high income neighborhoods in the Los Angeles are facing negative equity position in their homes.

Not since the Depression has a larger share of Americans owed more on their homes than they are worth. With the collapse of the housing boom, nearly 8.8 million homeowners, or 10.3 percent of the total, may lose their homes.

Bush Administration officials say they still oppose any taxpayer bailout for either people who borrowed more than they could afford or banks that made foolish loans during the height of the speculative bubble in housing. This includes majority of Los Angeles homebuyers who bought homes since 2001. In addition, sorting who can be helped and who will not be helped is a daunting task.

Troubled homeowner and their increasing nervousness is evident across Los Angeles, Long Beach, Irvine, Orange, Santa Ana, San Diego, Torrance, Pasadena homeowners where falling home prices and negative equity are increasingly common.

As Los Angles home prices fall, many file Chapter 13 bankruptcy to protect losing their homes through foreclosure. However, with the current bankruptcy code, it is difficult to save many homes in the Los Angeles area.

The Federal Housing Administration, meanwhile, is examining ways to expand its new insurance program, known as FHA Secure, to help people replace their costly subprime mortgages with federally guaranteed fixed-rate mortgages. However, for those in foreclosure now, it may be too late. Mortgage industry executives say that the F.H.A.’s eligibility requirements are too restrictive. In that regard, many Californians including those in Los Angles, Long Beach, Santa Monica, Torrance, El Monte, Pasadena are filing Chapter 13 Bankruptcy petitions to save their homes.