Help with mortgage loan modification and bk

[indebt00]

My Sister did ch 7 bk and it discharged in Sept 2010. Since then she has started trying to get a mortgage loan modification (financial situation has changed drastically, divorce).....

The mortgage company is telling her that they can not even start the loan mod process until the Trustee signs off on the bk and his orders (???) which I believe is in January. I guess in relation to whether the mortgage is part of bk?? i have no clue what this means. She did NOT reaffirm the mortgage but it was current...so not sure what this means. This was a ch 7 NOT ch 13???

My Sis has tried calling lawyer to get help this week but everyone is out of town.

She has not paid NOv payment and doesn't plan on paying Dec either..due to finances...so...

my question is....Can the foreclosure process happen quicker due to the fact she was already in ch 7 bk? We are hoping that she has a few months to either get the modification and save the house or...possibly lose the house (we don't want that but may not have a choice)

What do you guys think? thanks and Happy Turkey Day

[lrprn]

[COLOR="purple"]My Sister did ch 7 bk and it discharged in Sept 2010. Since then she has started trying to get a mortgage loan modification (financial situation has changed drastically, divorce).....

The mortgage company is telling her that they can not even start the loan mod process until the Trustee signs off on the bk and his orders (???) which I believe is in January. I guess in relation to whether the mortgage is part of bk?? i have no clue what this means. She did NOT reaffirm the mortgage but it was current...so not sure what this means. This was a ch 7 NOT ch 13???

Here's the issue. *ALL* debts are included in your bankruptcy case regardless of whether you file Ch 7 or Ch 13. Just because your sis is paying her mortgage while her Ch 7 is active still means her mortgage is a part of her bankruptcy case. Her mortgage lender can't do anything with the mortgage until her Ch 7 is discharged and closed by her trustee.

She has not paid NOv payment and doesn't plan on paying Dec either..due to finances...so...

Your sister needs to understand that by not keeping her mortgage up to date, she's opening the door to her lender starting foreclosure actions rather than trying to modify her mortgage.

If she wants to be certain keep the house, she needs to make the payments and keep them on time. If she can't make the payments now after her Ch 7 case is nearly over, then she's likely trying to hold on to something she can't really afford.

Even if her lender agrees to a modification, that could take many months. She can't keep skipping her mortgage payments until a modification comes through.

my question is....Can the foreclosure process happen quicker due to the fact she was already in ch 7 bk?

How fast the foreclosure process happens depends on two things - when her Ch 7 closes and the state she lives in. Each state has its own foreclosure processes. Some states allow a faster foreclosure than others. The fact she's just coming out of Ch 7 doesn't matter one way or the other.

We are hoping that she has a few months to either get the modification and save the house or...possibly lose the house (we don't want that but may not have a choice)

Again, if she can't pay the full mortgage amount now and a modification is required, then I'd say she should stay in the house as long as possible, but have Plan B waiting in case her lender moves quickly to foreclose rather than modify, or if the modification takes many months (most do).

[indebt00]

Here's the issue. *ALL* debts are included in your bankruptcy case regardless of whether you file Ch 7 or Ch 13. Just because your sis is paying her mortgage while her Ch 7 is active still means her mortgage is a part of her bankruptcy case. Her mortgage lender can't do anything with the mortgage until her Ch 7 is discharged and closed by her trustee. Her ch 7 was discharged in Sept....why does it take the Trustee longer to close? I do know they have to submit their 2010 tax return and that is the final requirement..so is this holding up the Trustee? so a discharge isn't a discharge?

Your sister needs to understand that by not keeping her mortgage up to date, she's opening the door to her lender starting foreclosure actions rather than trying to modify her mortgage.

If she wants to be certain keep the house, she needs to make the payments and keep them on time. If she can't make the payments now after her Ch 7 case is nearly over, then she's likely trying to hold on to something she can't really afford. She is going through a divorce that happened after the ch 7....so we are trying to save the house for HER...her income is changing drastically with the divorce (wasn't forseen during ch 7)

Even if her lender agrees to a modification, that could take many months. She can't keep skipping her mortgage payments until a modification comes through. I thought that people were trying to get mods because they couldn't afford their payment?? she has no choice on the payments right now

How fast the foreclosure process happens depends on two things - when her Ch 7 closes and the state she lives in. Each state has its own foreclosure processes. Some states allow a faster foreclosure than others. The fact she's just coming out of Ch 7 doesn't matter one way or the other. she lives in AZ

Again, if she can't pay the full mortgage amount now and a modification is required, then I'd say she should stay in the house as long as possible, but have Plan B waiting in case her lender moves quickly to foreclose rather than modify, or if the modification takes many months (most do).

we are doing this now...making a plan B

She can't afford the mortgage on her own after the divorce....so we were goign to try and get a loan mod to help her. She can not afford the current payment on her own no matter what...plus everything else. so we don't have a choice there. She is going to be a single mom on top of the unforseen/surprise divorece

[lrprn]

Does your sister's divorce decree have spousal or child support included? If yes and she still can't afford the mortgage, then she needs to let go of the house because she's going to lose it later down the road anyway.

I know it's not much, but I do understand this is very difficult for your sister and your family. As we discovered in my family with my sister's divorce, all too often it's the most innocent party that's hurt the most emotionally and financially when marriages split. However, the law doesn't allow for emotion or "fairness" - it's just a cold, emotionless interpretation of statutes in her state.

If your sister can't make the loan payments on the house with or without a modification, then the lender will foreclose. That's how the financial laws in this country work. I regret that we can't help your sister more in this very unfortunate situation. Sometimes it's best to close off the emotions and hurt from the past and figure out the best path to take moving forward in the most practical, unemotional way possible. Since she already can't make the mortgage payments and the modification looks to be months away (if it even happens), your sister needs to have a Plan B in place in case she loses the house.

In Arizona, most secured asset lenders will start foreclosure proceedings after 2-3 months of missed payments. She's on the cusp of that now. Rather than wishing the system was different than it is or wasting time on the unfairness of it all, turn your mutual energies into finding another place for her and her children to live that they can afford if it finally comes down to that.

[Cristo]

This depends greatly on who the lender is. I'm with B of A (formerly Countrywide) and they would not even talk to me about a Home Affordable Mod until I had missed 3 payments. My situation is different though, I got my mod before I filed for bk 13 and I did not have to deal with the courts on this. It took a long time and I had to write many threatening letters but it happened. It is worth a shot. Since she has already been discharged on the mortgage you do have a barganing chip in that she can just walk away from the house. Since she is in AZ where there are already so many people leaving their homes I would think they would want to work with her, but you never know. Of course if the house is far underwater she may be better off without it in the long run.

It's hard to go through so much trauma at once....bk, divorce, moving...but I hope that it turns out to be a true fresh start for her and that things start to come together. Best of luck to you.