NEED HELP...Modification after discharge

[struggling09]

In the process of attempting a Home Modification on 1st mortgage through Wells Fargo. 1st & 2nd mortgage loans were discharged through Chapter 7. Does anyone know if we are approved for the modification if we are reaffirming the loan?

[sofarsogood2]

Reaffirming commits you to paying off the loan as agreed in the original mortgage, mod or no mod. Signing a reaffirmation does not mean you have gotten a mod. In most circumstances, not reaffirming is best because if another hardship falls on you, you can't file for another BK for quite awhile, so there is no protection from the bank's collection efforts. (time frame differs, depending on 7 or 13). Sounds like you should discuss the pros and cons with your attorney.

[Stilltheone]

You're not reaffirming the loan, but you are on the hook for your new loan. You filed BK on your existing mortgage. If you modify it, you are changing the mortgage, therefore you have a "new" loan. You didn't file BK on the "modified" mortgage, but on your "old" one.

We've looked at getting a mod, but I never go through with it. We are so underwater, I'm just going to walk away from this house someday.

[Pandora]

There was someone else on here that got a mod after filing BK and discharge - and in their mod documentation it had a blurb about the BK and not being on the hook if they defaulted.

Your loan isnt a new loan when you modify - its the same loan - just different terms. The terms changing doesnt change the loan itself, its still the same loan you took out years ago, just moved around. What does change is that you sign those mod papers, therefore reaffirming the original note. If you can get your lawyer and your lender to agree to put a blurb in there regarding you still being able to walk away if default occurs without recourse on their part - then you'll be golden.

It can be done. Search the forum and see if you cant find the post - it was posted within the last month.

[Ugh07]

If you get a modification through the HAMP program you will NOT be reaffirmng the debt. It will in fact state that on the modification paperwork.

[brad10281]

Please be careful when reviewing your permanent modification paperwork. Mine doesn't state anything about our discharge but it does state that it reaffirms the debt and now I have to have the bank amend the paperwork. I'm waiting to talk to my attorney before I call the bank though.

[robinderp]

I had mine modified through Citimortgage through the HAMP program. There is a blurb which states that you are not personally liable even after modification. I had my BK attorney review just to be sure

[brad10281]

Just an FYI for anyone else that runs into this. I wrote a letter (email) to the VP of BofA as follows:

I have been working diligently trying to honor my end of a HAMP modification with BAC. I have successfully submitted the three trial payments and I received my permanent modification paperwork on May 23, 2011…thank you. I am very eager to sign this paperwork and put this whole ordeal behind me but I see that there is some verbiage missing from section 1 “My Representations and Covenants”. According to page 93 of the Making Home Affordable Handbook (https://www.hmpadmin.com/portal/prog...andbook_31.pdf) the following clause should be stated:



“I was discharged in a Chapter 7 bankruptcy proceeding subsequent to the execution of the Loan Documents. Based on this representation, Lender agrees that I will not have personal liability on the debt pursuant to this Agreement.”



I contacted your modification and bankruptcy departments today but had no luck with this. The modification department stated that there was no record of a bankruptcy; could this be the reason that the clause was not inserted into my paperwork? Why is my bankruptcy not on record in your home loan modification department?



I contacted my bankruptcy attorney and asked him to review the paperwork and the MHA Handbook. He recommended that I insist that the discharge language be inserted before signing the papers.



The following text was taken from the MHA Handbook:



10.1 Amending HAMP Documents

Servicers must amend the Modification Agreement and TPP Notice as necessary to comply with

applicable federal, state and local law. Servicers may, and in some instances must, make the

applicable changes to the Modification Agreement as set forth in the Document Summary

available on www.HMPadmin.com. In addition, servicers may amend HAMP documents as

follows without prior written approval.

…

Bankruptcy


If the borrower previously received a Chapter 7 bankruptcy discharge but did

not reaffirm the mortgage debt under applicable law, the following language

must be inserted in Section 1 of the Modification Agreement: “I was

discharged in a Chapter 7 bankruptcy proceeding subsequent to the

execution of the Loan Documents. Based on this representation, Lender

agrees that I will not have personal liability on the debt pursuant to this

Agreement.”

…



All I ask today is to have my paperwork amended as described above and sent back to me. If you can provide any assistance in this matter it would be greatly appreciated.


Believe it or not BofA is reworking the paperwork...but I'm still waiting for it to be sent back to me.

[Tom_Mi]

*Recommendation:* everyone read Brad's language above. It's good stuff. (I did this, and the bank didn't balk)

My bank reluctantly (long story) offered me a mod and said over the phone it was *not* reaffirmation. My attorney said that if the bank agrees it isn't reaffirmation, you may insert this language by hand. I handwrote it into in my signed version that I sent back. They did NOT balk. I did NOT call them after signing, no need to rock the boat if the process starts and the copy you signed has your language.

My only concern is that their mod agreement said they may re-establish credit reporting on it. And after my first pmt they slapped 4 +120s in the months prior to my signing. This cost me 100 fico points, but I'm back to 680. I think I can convince them that the law doesn't permit me to even GRANT them credit reporting rights, but you gotta pick your battles. That fight might make them AGREE the mod is illegal and kill my mod altogether. I won't rock that boat until it's time to look for a new house in about 6months.


This is a chess game...always anticipate their possible responses and have a plan for each one.

[brad10281]

Tom,
Thanks for the tip about hand writing it in. The bank said that they would amend the paperwork and send it back...that was 2 months ago now. Maybe I'll hand write that clause in there, sign it and then send it back to them with a little note to tell them I'm sick of waiting.

[Tom_Mi]

Brad, handwrite it and send it back signed. (check with your atty though, mine wasn't a real estate specialist).
They might be using that 2month wait as an excuse to hose you.

The "long story" I left out is that banks love to pretend to send mod agreements, then foreclose, saying you never returned it. Mine tried this but I caught them admitting they didn't send it and threatened to use that against them. They rarely admit not sending it, but I got lucky. They never send them registered...which I believe exposes their motives.