Automatic Stay lifted, now what??

[fflan513]

I have a chapter 13 and I fell behind on my mortgage payments and the company got the automatic stay lifted. If I bring my payments current fast (2 weeks) will they still start foreclosure? Prior to bankruptcy they had not started any foreclosure. Appreciate any insight here. tia

[despritfreya]

The lifting of the stay allows the lender to use what ever rights it has under state law to regain possession of the collateral. You will need to reinstate the loan under your State's law. That ususally means bringing the loan 100% current including all late fees and attorney's fees prior to any foreclosure.

[fflan513]

Thanks for your response. Its my understanding that the lifting of the automatic stay gives the lender the right to pursue any collection they deem appropriate. So you're saying if I get this thing 100% current including late fees, they likely will not proceed to a foreclosure?

[despritfreya]

If you reinstate the loan under state law you will be current under your contract and there will not be a foreclosure. You need to obtain a "reinstatement" amount to make sure you tender the correct sum.

[broke2]

If you reinstate the loan under state law you will be current under your contract and there will not be a foreclosure. You need to obtain a "reinstatement" amount to make sure you tender the correct sum.

Hello despritfreya...you mentioned the "under state law", is the state law difference from state to state?

Sorry to ask in the middle of different thread.

[justbroke]

We use the term state law or "underlying state law" in case it differs. Yes, the laws regarding mortgages, redemption, and foreclosure vary from state to state. Most state mortgage laws are consistent for the most part.

[catleg]

If you read your mortgage contract carefully, there is a clause which defines what happens if you default on payments to the mortgage and then subsequently bring it current which reinstates the contract.

I inadvertently went slightly over 30 days past due (about 55) with my WFC mortgage and the MFer's went ahead with a relief of stay motion. My lawyers started salivating over the extra fees to defend the motion, etc. So I got caught up with the payments, wrote a letter to WFC and got the late charges waived, and the scumbag WFC attorneys wrote up an order which will pay their $500 fees/costs "in the plan" which I hope means no extra money out of my pocket.
(I had cash management issues relating to how my income comes in).

They don't mess around with this stuff. I don't really understand what's in it for them except for charging the extra fees and making some money.

(Note: we didn't have any arrears in the ch13 plan to begin with)

[despritfreya]

In response to:

"I inadvertently went slightly over 30 days past due (about 55) with my WFC mortgage and the MFer's went ahead with a relief of stay motion. My lawyers started salivating over the extra fees to defend the motion, etc. So I got caught up with the payments, wrote a letter to WFC and got the late charges waived, and the scumbag WFC attorneys wrote up an order which will pay their $500 fees/costs "in the plan" which I hope means no extra money out of my pocket."

The fact that you fell behind, post petition, be it 30, 55 or more days, gave your lender the right to file the Motion and gave your lender the right to recover its legal fees.

In the future, if you have an issue with payments DO NOT fall behind on the mortgage. If you have to fall behind on anything, let it be the Plan payments. If you have a valid excuse as to why you have missed Plan payments your attorney can prepare and file a Motion for Moratorium. However, those missed payments have to be caught up. This is usually done by raising your Plan payments for the remainder of the case to cover the missed payments.

[fflan513]

Texas law

I'm in the state of Texas and what I have read says that prior to the lender proceeding with foreclosure the borrower must be given notice of default and allowed 20 days to bring the loan current before any acceleration clause can be enacted. If the default amount is not paid within the required time frame, then Texas foreclosure law allows the foreclosure to go forwards.