Wells fargo trying to hold off chapter 13 filing

[BOBBY1269]

Hello all,

i recieved a call from wells fargo today , they want me to go through a forbearance plan and they seem to be getting persistant about it.

Quick update on my situation

house value - $300000.00
1st mortgage - wells fargo - $355000.00 - 5 months behind
2nd mortgage - credit union - $37000.00 - 1 month behind

i wrote in a post yestrday of my situation , the credit union will not suborinate the 1st loan if they modify it , i told wells fargo a 1/2 hr ago of this andthey said they can get around it - i do not believe they can, i think wells fargo is up to no good.

I am going to file a chapter 13 - strip the 2nd mortgage and move on with it , i am tempted to believe wells fargo but i my instincts tell just to move foward with chapter 13 and and get this all straightened out once and for all.

I tried to workout a payoff with the credit union - they flat out will not listen - so i feel i gave them a chance - so now it will be stripped all together.

Your thoughts - listen to wells fargo about modification - or just get on with the chapter 13 filing - wells fargo has called me 2 x yesterday and 2x today once at work - when i needed help when i was 3 months behind they wouldnt even listen to me - much less - call , what are they up to ??

The rep that keeps calling me is from the office of the president for wells fargo which makes more suspicious.


Thanks for your thoughts
bob

[despritfreya]

Two observations:

1. Wells Fargo is your 1st. All a loan modification does is modify the terms of the debt. It does not cause a release or change in the lien. As a result there would not be a need for the 2nd to agree to anything. The 2nd would not be “subordinating”.

Since WF would not be releasing its 1st position lien, the 2nd stays in 2nd, nothing more, nothing less. Subordination means that the lien holder agrees to move down the food chain, usually from 1st to 2nd position. A release of WF’s current lien would immediately move the CU up the food chain to 1st but, as far as I can tell, that is not what is happening here.

If you were refinancing, thus creating an entirely new loan with a new mortgage and a release of WF’s current lien position, such would require a subordination of the 2nd so that WF could stay in 1st. It does not sound like you are attempting a refinance therefore, subordination appears to be a "red herring". (Hope this makes sense.)

2. Your best result, if you can wait, is to finalize the WF loan mod then file the 13 to strip off the 2nd since the CU will not work with you.

Work with WF. Take it at its word. You can always elect to do the bk sooner rather than later.

Edt: One final comment. . . since there seems to be a question about subordination, make sure WF is not releasing its lien as part of this deal. I am sure it is not but, if it does, you can kiss the strip off of the CU goodbye.

Des.

[catleg]

Usually the office of the president calling is a good thing, as this means it has been escalated beyond the 1st tier of idiot paper pushers.
The office of the president in any big company is usually someone empowered to fix things that are broken.
I would take the call and hear them out.

[BOBBY1269]

Hi all ,

i heard back from the rep at w.f. He said anytime they do a modification that changes the number of months that may change the the amount that is owed they have to suborinate the loan ---- i am as perplexed about this as anyone , anyway i know the credit union will not subordinate now that i am behind with them ( thier little way making things tough for us )

my feeling is that if w.f. Needs to subordinate the loan after forebearance of 3 months only to have the credit union say no , i may as well just pull the trigger onthe chapter 13 -- i am planning on filing in 2 weeks

you input is always appriecated .

Bob

[momofthree]

When my 1st was modified (Obama's HAMP program), there was no need for the 2nd to subordinate because there wasn't a need to re-file a new deed of trust. However, our modified balance was less than the beginning balance of the loan. IF your new balance will be larger than your original balance that was taken out, then they may want to re-file a new deed of trust reflecting the higher balance, which would require the 2nd to subordinate. However, I do not believe it is an actual requirement for a modification.

[despritfreya]

I understand the argument - changing the terms of the mortgage that is already a public record could be prejudicial to any junior lien holder.

But, I am still not convinced there is a problem. Remember, while folks are having a tough time getting loan mods, the fact is that many are successful and many of those have 2nd mortgages. Could you imagine the additional headaches there would be if the 2nd lien holder also had to approve the modification? Having said this, I decided to looked at my own Deed of Trust. On the very 1st page I found this:

"Transfer of Rights In Property: This Security Interest secures to lender the repayment of the loan, and all renewals, extensions and modification of the Note . . . "

This tells me that a junior lien holder is on notice from day one that a modification is possible.

I then decided to check a CU 2nd that I found off of my County Recorder’s web sit. Interestingly the one I looked at contained the following:

"Prior Mortgage or Deed of Trust, Modification, Future Advance: Borrower shall not enter into any agreement with the holder of any mortgage, deed of trust or other security agreement which has priority over this Deed of Trust by which that security agreement is modified, amended, extended or renewed without the prior written consent of the lender. Borrower shall neither request nor accept any future advance under a prior mortgage, deed of trust or other security agreement without the prior written consent of lender."

Pull your CU loan docs to see if something like the above is in there. If it is, then it appears that while, WF does not need the consent of your 2nd, YOU do. This may be why there is an issue.

I find this very interesting and would really appreciate you continuing to post your progress.


Des.

[knitty]

The OP initially said WF was offering a "forebearance" plan....isn't that different from an actual modification? I thought it was a plan to get the payments current over a specific period of time.

[despritfreya]

The OP initially said WF was offering a "forebearance" plan....isn't that different from an actual modification? I thought it was a plan to get the payments current over a specific period of time.

Good catch. Later OP references a modification hence going off in that direction. You are correct. A forbearance is not a modification as we are now familiar with. It is merely a catch up plan and would not require the formal changes of a modification.

Des.