any1 had a refinance issue in Bk 13?

[davids]

I will be heading into Chap 13 soon... well, my house must be refinanced
or I will face a huge ballon in about a year... catch 22...

my overall score is 574 - so far no one is willing to refinance me.

when i file Bk 13 - If I am unable to get a refinance now, then I surely
can not picture getting a refinance once in BK 13....

what happens if I am in a BK 13 and it is time to refinance, and wont be able to, and face this huge ballon?? Will my home still be protected, even though
the morgt company will now want $20,000 to pay off the ballon...
even though I would be still in BK 13, can my home be taken away,
if I can not make this ballon payment?

If anyone has faced a refiance issuse in BK 13, please let me know
how this would work out.

Thank-You

[HHM]

In a nutshell...your mortgage is a secured loan and you cannot rewrite the terms of the loan in a chapter 13 and secured creditors either get paid, or they get the property back.

Now, if you can afford to pay the $20K ballon in your chapte 13 plan, then it will be not problem, but if not, you will have a problem.

[davids]

Bk 13

In a nutshell...your mortgage is a secured loan and you cannot rewrite the terms of the loan in a chapter 13 and secured creditors either get paid, or they get the property back.

Now, if you can afford to pay the $20K ballon in your chapte 13 plan, then it will be no problem, but if not, you will have a problem.

Thank-You for letting me that I would have a problem, I would
have not figured that one out on my own

of course I dont have $20k to pay off the ballon, so whats the point
of filing BK if I am not going to be protected from creditors.

[HHM]

Well, what do you want me say, you asked what would happen, and I told you... either you pay the balloon by a refi, paying it, or paying in the chap 13, or you lose the house. BK largely only protects you from unsecured creditors, with secured creditors, it only buys you time, but inevitably, you must pay the piper when it come to secured debt. Reality is a *****, huh!

[californiamama]

Davids, will you be able to sell the house? Are any of your relatives willing to buy it from you and and let you still be the one to make the payments? then after you have reestablished your credit you can buy it back from them

[Jman30]

I will be heading into Chap 13 soon... well, my house must be refinanced
or I will face a huge ballon in about a year... catch 22...

my overall score is 574 - so far no one is willing to refinance me.

when i file Bk 13 - If I am unable to get a refinance now, then I surely
can not picture getting a refinance once in BK 13....

what happens if I am in a BK 13 and it is time to refinance, and wont be able to, and face this huge ballon?? Will my home still be protected, even though
the morgt company will now want $20,000 to pay off the ballon...
even though I would be still in BK 13, can my home be taken away,
if I can not make this ballon payment?

If anyone has faced a refiance issuse in BK 13, please let me know
how this would work out.

Thank-You

I recently went through a Chapter 13 refinance several months ago. let me know if you have any more questions about the process.....

[Elf]

I did it.

One year into a Ch13-- FHA will do a refinance. You can't take a dime out-- they wil just pay off the existing mortgage and write a new one.

They will want to see that you made all of your payments to the trustee on time for a solid year. You will need to write a letter to the judge who is in charge of your case, explaining why you need to refinance. Your trustee must agree.

They will not likely agree if your payment goes up so that you can't pay your creditors what you have already agreed to pay back.

In my case-- I had the house as part of a divorce settlement. If I didn't refinance and get my ex off the mortgage, he was going to request a lift of stay and then try to take the house back.

The courts want you to keep your home because if you do, it becomes more likely that you will finish the plan.

Talk to a broker now so that you can begin to get set up for refinance. Hope this helps!

Good luck!
Elf

[Jman30]

I did it.

One year into a Ch13-- FHA will do a refinance. You can't take a dime out-- they wil just pay off the existing mortgage and write a new one.

Elf, I refinanced with an FHA loan and I got $10K back. My house was appraised at $208,000. I owed $159,000 on the house. I got a loan for $200,000 and paid off the mortgage and teh $31K to the creditors through the Trustee. I got back the 10K difference.

[CJKraft]

I was in a similar situation where I needed to refinance but wasn't able to b/c of my fico - very frustrating! After being denied by several lenders, I finally found one agent that actually helped get my fico high enough to make the loan go through. Keep searching for a good loan agent - don't give up!

Good Luck!

[Jman30]

I was in a similar situation where I needed to refinance but wasn't able to b/c of my fico - very frustrating! After being denied by several lenders, I finally found one agent that actually helped get my fico high enough to make the loan go through. Keep searching for a good loan agent - don't give up!

Good Luck!

You are 100% right, I should have mentioned that. I did go through all three of my credit reports before trying to refinance. I cleaned up small stuff (like bad addresses, alias's, etc) and I made sure that everything that was included in my BK was properly reflected in my credit reports.
Plus, I knew what was in them before I started calling around which allowed me bring it up at the beginning, so I wouldn't have my time wasted.

[taxmom]

I have a similar situation, but without the balloon payment. Rather, an adjustable rate mortgage that I just received notice of an increase in payment of over $600/month starting in January.

We currently are 9 months into a Chapter 13. When we started the 13, I asked the attorney what would happen when the mortgage adjusted in December, and the response I got was that we would cross that bridge when we came to it. Well, here we are, and the great advice I got was to surrender the house -- oh, and owe on the deficiency balance. Nice...

Loww 500 FICOs, decent income, only paying back 5% to unsecureds. Does anyone think a refi is possible? We might be able to eke it out to 12 months, but probably not too much longer.

REALLY need some advice here!

Thanks!

[lrprn]

I have a similar situation, but without the balloon payment. Rather, an adjustable rate mortgage that I just received notice of an increase in payment of over $600/month starting in January.

We currently are 9 months into a Chapter 13. When we started the 13, I asked the attorney what would happen when the mortgage adjusted in December, and the response I got was that we would cross that bridge when we came to it. Well, here we are, and the great advice I got was to surrender the house -- oh, and owe on the deficiency balance. Nice...

Loww 500 FICOs, decent income, only paying back 5% to unsecureds. Does anyone think a refi is possible? We might be able to eke it out to 12 months, but probably not too much longer.

REALLY need some advice here!

Thanks!

I'm wondering why your lawyer didn't tell you that he/she can file an amended plan that includes the newly increased mortgage payment and reduce your monthly payment to the trustee? Why was the only recommendation to walk away from the house, especially since you would owe money afterwards? Is the house making you too 'house-poor' to make it worthwhile trying to save it?

[Elf]

Sure, you can take money out if what you are doing is a refi so you can pay off your BK. You can't just pay off your plan. You have to pay off everything that you originally owed. You can do that with your trustee's okay, and you get to keep the change. But you can't refi and take out money that increases your monthly bills that would put your plan into jeopardy.

On a recent enough loan without equity to pay off the BK, you don't do that.

I thought the point was a refi to avoid the balloon, not to to pay off the BK. In any case, sometimes you're paying so little on the dollar, why would you refi to pay it off? There is alot to be said for patience in this process.

[inseriousdebt]

Refinance on an ARM

We are in a similar situation, but this will not happen to us till the end of next year. Our mortgage will turn into an ARM, and I am SURE our payments will go up. We would love to refinance to get out of it, but I don't see that happening since we will only be 1.5 years into our payment plan. We have two mortgages on our home that we pay outside of our bankruptcy. Does anyone have any good ideas of places that will do this? We are through US Bank currently. We were also not told anything specifically when we asked our attorney about this. He did mention an amended plan if needed.