Loan Modification leads to Chapter 13

[ilbcertain]

Long story but I will shorten it as much as possible-

My work slowed down in 2009 to the point where I was making 50% less than the year before (100 % commission sales ). While my wife had a job it was tough to make ends meet. I talked to the bank and they informed me I should qualify for a loan modification for the house, so we filled out the paperwork and sent it in around July 2009. We kept everything current until January 2010.

At this point ( after dozens of calls ) we finally heard back from the bank and they told us to re submit the paperwork because they lost it. We made a decision at that time to pay everything else except the house and when we get approved, the arrears would be put back on the end of the loan. After 10 months of not paying the mortgage they were going to foreclose on the house before we heard back on the loan modification application.

We then contacted an attorney and he told us to file a chapter 13 to stop losing the house, witch we did. We met all the means tests and were given a monthly payment ( with arrears ) that was somewhat doable.

We continued making the trustee payments for about 6 months before we could not keep up anymore so we decided to let the house go ( we are 100K underwater but wanted the kids to finish school). The attorney modified the 13 and trustee confirmed it the following month.

So basically we stopped making payments in 2010 for 10 months and then the last 6 months of this year. Other than someone taking pictures of the house we have not heard from anyone ( we did have PMI on the house ) Will they have to start over with the forecloser process? who will contact me, the bank or the PMI company? We are still living in the house but are confused about the process now.

Sorry about the long post but we wanted to stay in the house as long as possible to save money and wanted to know when we would have to move.

[papie]

They exact same thing happened to us. We had some issues in late 2008 and the mortgage company told us to default on our mortgage so that we could get a modification. We defaulted on the mortgage and applied for the modification. We tried to get the modification for a year and then one day we got a letter saying that although they were still working on the modification, they were sending our file to the foreclosure department. We filed bankruptcy in December 2009 to save the house. In August 2011 we had enough and decided to surrender the house in our Chapter 13.

Obviously, it's now January and we've heard nothing. My impression is that they have to start the foreclosure process all over again. US Bank has been sending us letters like crazy that say the same thing "If you are having trouble paying your mortgage, you may be eligible for a modification!" Umm, no thanks, we tried that, we're over it. This house needs more work than we can afford while making Chapter 13 payments.

I'm kind of amazed, I thought they would start the process very quickly to foreclosure....no dice. We're moving for our jobs though, so unfortunately we can't stay and ride out the no mortgage payment train.

Foreclosure processes vary by state and bank. I asked the paralegal at our lawyer's office and she said that we will receive periodic notices from the bank during the process. In our situation, I honestly hope they get all this cleared up pretty quick. If I were you I would call your lawyer and ask what the process is in your state.

Good luck to you! And know that you're not alone.

[knitty]

Similar situation here...no payments since May, 2010, several attempts at modification; have heard nothing from lender (HSBC) since July, 2010, no letters, notices, NOTHING! I think they're waiting the BK out, too much trouble to deal with BK court maybe?

[ValleYum]

Long story but I will shorten it as much as possible-
<respectfully snipped>
We are still living in the house but are confused about the process now.

Sorry about the long post but we wanted to stay in the house as long as possible to save money and wanted to know when we would have to move.

Luckily, Washington state has very definitive foreclosure guidelines for mortgages bound by a Deed of Trust (for a non-judicial foreclosure). Here is a copy of what they are directly from the Attorney General's office:

http://www.atg.wa.gov/uploadedFiles/Home/Safeguarding_Consumers/Consumer_Issues_A-Z/Foreclosures/Foreclosuretimelines.pdf

What part of WA are you in? Where we are in SW Washington there is lots of inventory of REO properties - we received our NOD in May - then nothing. They mail you the NOD certified (one to me, one to hubby, one to us as a couple and one to 'addressee') and either serve you personally or post it on your door. Neither hubby nor I was here so they stuck it to our garage door inside a plastic sheet protector. So this means for us that once they serve the Notice of Trustee's Sale we will still have at least 90 days to get moved - and 20 days beyond the sale, to boot if we needed it. You guys would be at least 30 days longer since you have not received a NOD - plus the bank will have to get your automatic stay lifted to boot.

We are able to check on our County Auditors website and other than the appointment of a Trustee (not a BK one - the one that handles your foreclosure) on the same date as the NOD - nothing. When we first received it, I called the Trustee service and offered DIL - they said NTY. I called the bank offered a DIL - they also said NTY but that I could short sale the house. That is when I said NTY. LOL

We do get a FedEx every 2-3 months telling us they are willing to help and to visit them at their new modification center. AS IF!

Check with your lawyer to be 100% certain (as always) but I hope this makes you feel a little better!

PS: I answered you here on this thread back in September, too! LOL I thought your screen name was familiar but I will leave this in an attempt to help others in the future.

http://www.bkforum.com/showthread.php?73397-Foreclosure-while-having-PMI-and-timeline