Can I apply for a mortgage mod while in an active ch.13?

[NeedOptions]

I am currently in a 5 year 0% plan and was wondering if I could apply for a mortgage mod on my house which is upside down about 125k. I was wondering if Wells Fargo would even talk to me considering I'm in an active ch. 13. I have never missed a payment on my house and wished I stop paying before I filed ch. 13. Any ideas? Thanks.

[justbroke]

Why do you need to do this? Are you having trouble with the payments or are expecting a rate increase on an adjustable rate mortgage (ARM) or "pay-option" mortgage? If so, you can approach the bank. Be aware that any savings you get, may just be considered "disposable" income (DMI). Of course a new B22C (Means Test) would be completed (along with I/J) to see if the surplus money is in fact DMI for purposes of the Plan.

Now, looking at being upside down by $125K is tough to swallow. Do you have a second mortgage on this home? If you do, did you lien strip it? If not, and you're upside down by $125K on a home worth less than $1,000,000.00... why are you trying to keep it? It is an honest question because I don't know why you'd try to save a $400,000 home that is $125K underwater (or whatever the value is).

[Curly]

NeedOptions: I just finished up with a Mortgage Modification. I've been in Ch 13 for 2.5 years. You can do it. However, you will need your BK lawyer to fax a letter to your lender stating that they have permission to work with you on your modification. Once the modification has been created by your lender they will send some paper work to your BK Lawyer. Make sure to keep in touch with your lender. My Modification was sent to my lawyer on July 18 and received by his office on July 19. My lawyer lost the paper work. I did not know about my modification until I called my lender again August 3. The first payment was due August 1. Anyway. Yes it can be done. However, everything will go through your lawyer.

[NeedOptions]

My apologies for a late response. I have a 30 year fixed and have had the loan for the past 8 years. I am currently at a 5.75% int rate. I only have a first and no second. I am trying for a loan mod because, well, frankly, I would love to use that money somewhere else (kids education, etc). I have no problems giving the trustee whatever savings I can get for the next 4 years because I know that after the payments are finished, I would have more disposable income. My wife does not want to give up the house, even though we are upside down close to $125k. Besides, if I do give it up, I would have to rent and renting is very expensive now.

Curly, may I ask which mortgage company you were with and how long the process took? Thanks.

[Flamingo]

My apologies for a late response. I have a 30 year fixed and have had the loan for the past 8 years. I am currently at a 5.75% int rate. I only have a first and no second. I am trying for a loan mod because, well, frankly, I would love to use that money somewhere else (kids education, etc). I have no problems giving the trustee whatever savings I can get for the next 4 years because I know that after the payments are finished, I would have more disposable income. My wife does not want to give up the house, even though we are upside down close to $125k. Besides, if I do give it up, I would have to rent and renting is very expensive now.

Curly, may I ask which mortgage company you were with and how long the process took? Thanks.

Remember during a loan modification, that $125,000 you are underwater on your first mortgage is not going to disappear - a modification will stretch it out over a longer-term, possible interest rate reduction, etc. or a clause stating that if the house is sold that money is owed. Make sure you do your homework before signing any papers and determine if you can actually afford to keep your home.

[Curly]

NeedOptions: sorry for the late reply. My Mortgage Co was LBPS Inc. It took about 35 days once they received all the paperwork. Flamingo is correct the amount you're underwater will not be forgiven. Plus, your Mortgage Company probably won't do a cram down. My modification they stretched it out to 40 years and lowered my % rate.

[klandsb]

Curly.... Did u have to get the OK from the trustee and is your mthly Chapter 13 pmt going up or are your creditors getting more ???. I am 2 yrs into my Chapter 13 and everything is going smooth.. I dont want to mess it up with a modification but saving the 2% interest would be great in the long haul .. Not sure whether to ride out the 3 yrs and hopefully interest rate w/still be down or go for the modification now ???
My trustee pays all of my payments so I am leaning towards just riding it out in fear of messing up a good thing....

[Curly]

klandsb: Your Mortgage company needs permission from your lawyer to do the modification. Once the modification is created by your Mortgage company the papers will be sent to your lawyer. You will need to sign them and have two pages notarized. Your lawyer will need to send them back. Your lawyer will also need to submit them to the trustee for approval. Our plan payment did not go up. If you have a second mortgage or home equity loan I would look into getting it stripped. I read something about that on this board. Good luck with the modification.