Motion for relief from stay

[Scottowl]

My mortgage lender filed the motion for relief in the 2nd week of February.
My attorney is confident the lender will work with me to resolve the back payments. At least he was about 3 weeks ago. My once a week plea for updates have gone unanswered.

At my attorneys advice I did not make payment in February or this month, so I believe I am almost 5 months behind.
What would you expect a mega mortgage lender to do about a 105k loan that is (on paper) 20% underwater?
I believe what I owe and the current market value are close to a wash.

Do they really want to foreclose, or would they be agreeable to forbearance, or even a modification? It would be difficult to increase the monthly mortgage payment until I was caught up. The trustee did a good job of getting most of my discretionary income.

I have saved most of the back payments, but would likely be 1500$ or so short, or about 65% of the total deficit.

What is the mechanism of the motion? Does the court have to grant it? After that, I assume collection activities would begin.
Also, if foreclosed, would the monthly payment from the plan on the arrears pre petition continue?

[justbroke]

Sorry to read that you're lender has decided to go for the relief from stay (RFS).

At my attorneys advice I did not make payment in February or this month, so I believe I am almost 5 months behind. What would you expect a mega mortgage lender to do about a 105k loan that is (on paper) 20% underwater? I believe what I owe and the current market value are close to a wash.

They would likely still seek foreclosure.

Do they really want to foreclose, or would they be agreeable to forbearance, or even a modification? It would be difficult to increase the monthly mortgage payment until I was caught up. The trustee did a good job of getting most of my discretionary income.

No bank wants to foreclose, but they will foreclose if they are losing money or there is a high-risk of a loss.

I have saved most of the back payments, but would likely be 1500$ or so short, or about 65% of the total deficit.

If you're only $1,500 short then that shouldn't be too bad to negotiate before the RFS hearing.

What is the mechanism of the motion? Does the court have to grant it? After that, I assume collection activities would begin.

Yes. It's pretty cut-and-dry unless you come current or the lender and you agree on a timeframe to come current. For arrears that occur during the Chapter 13 (after filing), that usually means proposing to come current within 6 months. You could also seek to amend the plan and cure the missing payments over the remaining duration of the plan (difficult to get creditor to agree). Or ask the creditor to modify the terms of the mortgage via a mortgage modification.

Also, if foreclosed, would the monthly payment from the plan on the arrears pre petition continue?

This is a good question. I would think that they are entitled to this claim unless and until they foreclose and there is a deficiency. In that case, they may be able to modify their existing claim, but I'm not familiar with this process.

[Scottowl]

I have not been in a good place the past little while. I have been in constant pain, both physically and emotionally.

Over the past two weeks I have become a regular at several doctors offices, and am snapping out of it.
It is difficult to make sound decisions when all you have is pain.

That's all besides the point. I have decided to take things as they are dealt, and not anguish over what is in the future.
I do want to work as long as I can, but the driving force will be my physical ability, not gutting it out to finish this plan.
I'm soon to be 63, and still have 3 years and 5 months until the plan ends.

What do you suppose the consequences would be if I withdrew enough out of the 401k to cure this problem?
I have asked my attorney, and heard only crickets...

[justbroke]

You could use your 401(k) to deal with this issue. The question will be whether or not you will fall behind again. I understand your pain and the current environment doesn't help. If I'm correct, then we're only talking about a few thousand, right?

[flashoflight]

There is no option to keeping the house without paying. If you want to stay, you have to pay. They don't care about your story and the judge probably won't either unless you make an arrangement to pay. They will 100% foreclose unless you come up with a deal to pay the arrearages off and the next time you miss a payment, they can go straight to foreclosure without the RFS hearing. Once RFS is approved, you have no chance of saving the house because the lender will add A LOT of junk lawyer fees on to your arrearage which may double the amount of back mortgage payments. If foreclosure is inevitable, do as your lawyer says and do not pay a dime to the lender and use every available option to postpone foreclosure and eviction under covid rules in your state.

[flashoflight]

In the future if you decide to catch up, you absolutely no matter what reason cannot miss a single mortgage payment. The mortgage payment is required in your plan to get the discharge. It's effectively the same thing as skipping the trustee payment in importance. If you are behind on the mortgage when your plan is done, you won't get the discharge. I know you're ill and all, but you cannot miss the trustee or mortgage payment due to sickness. If you need to amend your plan to lower your payment burden, now is the time to do it.

[Scottowl]

The lender filed the RFS on 2/12/21.
I did not receive a notice. My attorney contacted me about it.

I looked it up in PACER. I had 14 days to dispute, which I had no defense for my actions anyway.
Will I or my attorney get notice of the court hearing?
Will the hearing happen within the next week or two, or longer?

Your point about making the mortgage payment priority 1 is well taken.
I was under the impression that I could get it caught up in the last year of my plan.
It obviously does not work that way.

The RFS document as it appears on PACER shows a default of $2516.48 and fees of $442.50.
If I paid this amount and this months payment, would it all go away without a hearing?
My previous Ch 13 experience tells me it is not nearly that simple.

Also, in the event of foreclosure, would the mortgage debt be discharged if my case was otherwise successful?

[justbroke]

The lender filed the RFS on 2/12/21.
I did not receive a notice. My attorney contacted me about it. I looked it up in PACER. I had 14 days to dispute, which I had no defense for my actions anyway. Will I or my attorney get notice of the court hearing?

You'll have to ask your attorney whether they have filed a motion in opposition, but it doesn't appear that way.

Will the hearing happen within the next week or two, or longer?

I don't know if this has to go to a hearing or not. Some districts use "judicial" or "negative" noticing which allows the court to act on a motion without a hearing. I don't know what happens in your specific district or whether a hearing is mandatory.

If I paid this amount and this months payment, would it all go away without a hearing?
My previous Ch 13 experience tells me it is not nearly that simple.

Actually, it is that simple. But you could spread it out over some number of months (3-6 months is typical). They may still have a hearing if you pay the fees but I can't tell you whether the court will still grant the RFS. Even if granted, and you paid and are current, they can't foreclose, but it would put them in an easier position to foreclose if you miss another payment (or two). They wouldn't need to go back to the court for another RFS.

Also, in the event of foreclosure, would the mortgage debt be discharged if my case was otherwise successful?

That should be the case. Your attorney would likely need to modify the plan to show surrender of the property.

[Scottowl]

Actually, it is that simple. But you could spread it out over some number of months (3-6 months is typical). They may still have a hearing if you pay the fees but I can't tell you whether the court will still grant the RFS. Even if granted, and you paid and are current, they can't foreclose, but it would put them in an easier position to foreclose if you miss another payment (or two). They wouldn't need to go back to the court for another RFS.

My choice would be to drag funds out of my 401(k), and be done with it. I do hate to do that. The idea is to build the account, not deplete it. I do need a place to live though.

Another possibility is to temporarily lower my contribution until its rectified.
I wonder how the trustee might react to that?

The only thing keeping me from dumping the house is the lack of rentals in the area.
The ones with vacancy are nearly double what I am paying now.

I now have a furry dependent in the form of a Chihuahua. It's always a hassle to rent with pets.
Once upon a time I sent a dog to the rescue shelter when I had to move. That still bothers me, 30 years later.