Hi, new here, need some help.

[lynnws]

A little background, bought our home in Oct. 2006, got 2nd mort. Spring of 2007, husband lost his job in Jan. 2008. Took a job in another State and listed the house with a realtor. House did not sale, bank started foreclosure, had the foreclosure stopped for possible short sale, bank denied it. Foreclosure process back on as of late summer 2008. Fast forward to July 2009, husband gets transferred back to this State, called Wells Fargo to see if we could work out something to reclaim the house, they said yes a loan mod. Moved back in end of July 2009. They had been messing with us ever since with paperwork, saying mod, is pending, then requesting more paperwork and so on.

So, we are thinking a Ch. 13 could save the house, right? We want to keep it and I really don't think Wells will honor their loan mod. I am just afraid they will foreclose and we will be on the street.

Thanks,

L

[LadyInTheRed]

Yes, a Chap 13 could save the house, assuming you can afford a plan payment that includes the arrears, trustee fees, attorney fees and any other minimum amounts that must be paid during the plan.

But, don't give up yet on the mod. Keep working with Wells Fargo and jumping through their hoops. In the meantime, start consulting with a few BK attorneys now and get your ducks in a row for filing BK so you are ready to file if you need to move quickly to stop a foreclosure.

If you haven't already, check out the forums on loansafe.org where you will find lots of information on loan modifications, including a forum specifically for Wells Fargo mortgages.

[lynnws]

Thanks for replying, we have a consult with an attorney this week.

[justbaby]

I was in the same boat with Wells Fargo...they promised me a modification but after a year of sending in updated information and talking to them weekly...it never happened. Well on June 23, 2010 they started foreclosure saying they didn't receive all of the necessary updated information (go figure) BUT the previous post is correct, chapter 13 does stop foreclosure as long as you are able to pay the trustee AND your mortgage!

[NoTomatoCan]

How many months have you gone without paying? If you have arrears back to January 2008 you just need to make sure that you can pay that amount in your plan along with your actual monthly mortgage payment. 2.5 years of arrears could be pretty hefty.

So to concur with others, you might really need want to see about getting that loan mod depending on your income/expense situation.

[lynnws]

Yes the arreas is around 40k, so not sure what will happen. Called Wells today,no change, still pending. whatever that means.

[lynnws]

So for a 13, we will pay the arrears plus the current mortgage monthly amount? I think I am confused on how it works.

[momofthree]

Yes, you'd have to pay $667/mo for your arrears + regular monthly mortgage payment + attorney fees + trustee fees + any additional DMI that you may have for 60 months....

[lynnws]

Oh my, may just walk away then of Wells doesn't come through with the loan mod. What is DMI?

[momofthree]

DMI = discretionary monthly income. When you file ch.13 you must pledge all of your DMI to the plan for the full term of your bk.

For example--just to use round numbers--if your income was $5000 and your allowable expenses totaled $4000, then your DMI would be $1000/mo. ($5000-$4000 = $1000) From that $1000, you'd pay the $667 arrears + $45ish attny fees + $100ish trustee fees and the remaining $188/mo would be distributed to your unsecured creditors.

Hope that helps.

[lynnws]

Ok, that makes sense. What about our car loan, could we put that in the payment plan? This may work.

[lynnws]

I have just my credit cards in with a credit counseling place, been paying about a year, would that stop and those be put in it too?

[momofthree]

Yes, your credit cards would all be included. You would no longer make any payments to the credit counseling company.

[lynnws]

Saw something on here about if you own a vehicle outright, there is an exemption? What does all that mean? We have a loan on one vehicle and own one outright. Confused a little. momofthree thank you so much for helping me

[SMinGA]

The car loan may be payable inside the plan - depends on the district and how your attorney sets up your plan.

It could work to your advantage, helping you have enough DMI to pay enough into your plan.

Say you have a $400/mo car payment, 3 years left and owe about $12,000 balance. By having that loan paid thru the plan it increases your DMI $400/mo (you would not make the payment directly) and your car loan would get paid off ahead of unsecured. It would get some interest, but most districts have car loans around 4-6% when paid in the plan.

Ok, that makes sense. What about our car loan, could we put that in the payment plan? This may work.