Early payoff questions

[jennerik]

Hello, everyone. I have been reading this forum for a few months now and have found many answers to my questions! Thank you for that, but I have a few more that I could not find answers for anywhere on this forum or on the internet. Here are the cliff's notes:

1.) Confirmed for 13 on Oct 30, 2009. 100% payback. $49,000.00 (rounded off)
2.) Kept the house and the car, had a lien strip done on the second.
3.) Just got the notice from the trustee on what has been paid and what is left to pay. It shows $28,900.00 ( payment is $1,956.00 per month).

Am I correct in thinking that if we can pay this off earlier than the 60 months, as long as all the debt is paid, we can get a discharge? We have only been in it 13 months and a relative is offering to pay it off.
If we do not pay it off early and let it run it's course until it is paid off next October, will the trustee set the wheels in motion for a discharge? Or do we need to initiate the discharge?
Our attorney was horrendous. The trustee herself advised we file a report against him with the BAR and with the trustee office. We did. I cannot afford to hire another attorney to answer these questions so I turn to you, o wise board.
I am sorry if I left out vital information. Just ask me what you need to know and I will happily answer!
Thank you all!

[biotechsolution]

Since you're lien stripping it's not a 100% payback. So it will be up to the trustee has to whether you can pay it back early.

[justbroke]

Yes you can pay it off at 100% if you have the money. Unfortunately, it reads as though your "lien strip" -- which was bifurcated into an "unsecured claim" -- is not included in your number above.

[despritfreya]

Yes you can pay it off at 100% if you have the money. Unfortunately, it reads as though your "lien strip" -- which was bifurcated into an "unsecured claim" -- is not included in your number above.

Maybe not. We do not know if the 2nd was a PMSI 2nd. If it was, it may not be entitled to an unsecured claim based on the any applicable anti deficiency statute. In my State I routinely object to any POC filed by a purchase money 2nd. Normally it only takes a phone call to the creditor's attorney to get the claim withdrawn.

Des.

[jennerik]

What is a PMSI 2nd? On the status report, it shows as an unsecured, but not claimed.

[despritfreya]

What is a PMSI 2nd? On the status report, it shows as an unsecured, but not claimed.

A PMSI 2nd is a 2nd loan taken out at the time of the purchase. Lenders were routinely doing this to push a sale through. The 1st was either 75% or 80% of the loan and the 2nd covered the remaining 25% or 20% of the loan. That was the only way for the lender to get the loan completely through underwriting. Big scam. The lender called it a HELOC and this usually happened when the borrower had little or no $$ to put down thus financing 100% of the purchase price.

Des.

[jennerik]

Oh, I see. No, this wasn't taken out at the time of purchase. We took the second out to help pay medical bills in 2005. We went to refinance in 2007 to combine the two into a 20 year. Then the Countrywide scandal hit (they held the 2nd) and they wouldn't subordinate. Then the market crashed and the value of our house went from $385,000 to $185,000. I lost my job since the company I worked for went bankrupt. I am still owed pay, but I know I will never see it. I have a great job now and we are making the payments on time, but it is very, very tight.
So, if it shows as unsecured and not claimed, then the $28K is real?

[justbroke]

In my State I routinely object to any POC filed by a purchase money 2nd.

You are one great attorney! I wish more were like you. (And, the poster is from California which is a non-recourse State. Unfortunately, my state (Florida) isn't.)

[momofthree]

So, if it shows as unsecured and not claimed, then the $28K is real?

Are you looking on Pacer or 13datacenter? I ask because both my mortgages show no claim on 13datacenter (well, they're listed but show $0 under the claim amount), BUT on Pacer they did file a claim. For some reason, it just doesn't show on datacenter. I recommend checking Pacer if you haven't already...

[Pandora]

Maybe not. We do not know if the 2nd was a PMSI 2nd. If it was, it may not be entitled to an unsecured claim based on the any applicable anti deficiency statute. In my State I routinely object to any POC filed by a purchase money 2nd. Normally it only takes a phone call to the creditor's attorney to get the claim withdrawn.

Des.

Hey Des - would it matter if you did an 80/20 - but 3 months later, refied the 20 to get a lower rate? Thats what we did...and we're able to strip our 2nd. Is it because we refied but didnt "cash out" anything additional that we were able to do so?

Our lawyer stated we could pay off our 13 early as well even though the 2nd isnt getting 100%. Its rather strange - our only other items were prop. taxes from 2009 and then a few medical bills we had to include, then trustee and attorney fee's. Our plan says 100% payback based on our base plan, which is the amount of our non-exempt assets only, if we didnt own our vehicles outright, then I'm assuming it would be different as we had no other real assets. Here is where the confusion comes in for me - lawyer says its 100%, 13Data says 100% - yet my confirmation paperwork says something like 45%, but it also has 100%.

So.. I have no idea whats right. Our secured is getting 100% - the 2 dr bills are getting 100% - yet the 2nd mortgage will get less than 100%. ??? Can you have 2 different percentages? Is it because we stripped the 2nd that it could be considered 100%?

[despritfreya]

Hey Des - would it matter if you did an 80/20 - but 3 months later, refied the 20 to get a lower rate? Thats what we did...and we're able to strip our 2nd. Is it because we refied but didnt "cash out" anything additional that we were able to do so?

Our lawyer stated we could pay off our 13 early as well even though the 2nd isnt getting 100%. Its rather strange -. . . lawyer says its 100%, 13Data says 100% - yet my confirmation paperwork says something like 45%, but it also has 100%.

So.. I have no idea whats right. Our secured is getting 100% - the 2 dr bills are getting 100% - yet the 2nd mortgage will get less than 100%. ??? Can you have 2 different percentages? Is it because we stripped the 2nd that it could be considered 100%?

In response.

1. My comment about objecting to the 2nd must be taken in context. In my State, since the anti deficiency statute precludes personal liability and the PMSI 2nd is nothing more than a split of the original loan, there can be no unsecured claim as such would mean "personal liability". However, I only make an issue of this if the Plan is close to or suppose to be a 100% payback. If not 100% then I really do not care who gets the $$ so I let it slide.

2. In your situation you refied the PMSI 2nd. If this was my State I would use my argument since, so long as the refi matches the PMSI 2nd exactly, it is completely traceable to the purchase of the home. However, I have never dealt with this specific set of facts.

3. As it relates to your Plan there is a simple way to determine if you are paying 100% or something less. Pull the claims docket off PACER. Add all of the unsecured claims up, (if your 2nd filed a secured claim, but did not amend it to unsecured status, it should not be counted in the mix), add to that what ever else is to be paid (auto + interest, attny fees, taxes, mortgage arrears) then add to that total the Trustee's fee (use between 8 and 10% as I do not know the exact percentage). See what that comes to as compared to the total Plan funding.

Des.

[Pandora]

thanks Des for the explanation. Yeah - I added everything up and if we were paying back 100% in full, our plan payment would have to increase like $1K a month so...know its not 100% technically. Our 2nd still shows as secured claim even though strip was approved and all docs elude to that fact (approved strip - states "Lien avoided, 100% unsecured). I guess the real question is - is our 2nd getting paid as an unsecured or secured even though its approved for strip. Attorney says unsecured % applies due to strip, however, how can other unsecured's get 100% of payment (dr bills) but 2nd gets less than 100%?

Our attorney fees incl. AP are $2750 and trustee fee's are 6.9. - base plan is 36K due to non-exempt assets (vehicle valuations and tax return) (under median btw), payment was allowed for 60 months due to not enough DMI to fund a 36 month. So if I break it down to each claim / allowance: trustee fees are essentially $2500 over course of plan, legal $2750 = $88 combined roughly out of our payment @ 100%, Pers. Prop =$15 (100%), dr bills = $34 (100%) ... leaving about $463 or therebouts to the 2nd, yet its short being paid in full by about $50K.

How can one have some unsecureds being paid at 100% yet not all? Trustee's office and lawyers office both state the prop. taxes and dr bills will be paid at 100% - yet the 2nd wont be. I think thats where I'm confused. Does that make sense? I know they're adding it in the mix (as you stated above) because it shows as such.

[jennerik]

Are you looking on Pacer or 13datacenter? I ask because both my mortgages show no claim on 13datacenter (well, they're listed but show $0 under the claim amount), BUT on Pacer they did file a claim. For some reason, it just doesn't show on datacenter. I recommend checking Pacer if you haven't already...

Hi there momofthree. I looked on Pacer and am waiting on my password for 13datacenter. on Pacer, there is no claim from Countrywide/BofA for the second.
Justbroke...what does a "non-recourse" state mean? **Edit...never mind. Just googled it.

[Pandora]

jennerik

Just wanted to say Sorry if it seems like I hijacked your thread didnt mean to - my apologies to you

[jennerik]

jennerik

Just wanted to say Sorry if it seems like I hijacked your thread didnt mean to - my apologies to you

No worries! Jump in anytime! :-)