Bank wants me to modify after chapter 13

[ilbcertain]

9 months after including the house in a chapter 13, the bank has contacted me and asked if i would be willing to send in all the paperwork to try to modify my original loan. We tried modifying the loan before we filed but they took over a year to respond and by that time it was too late.

We like the house and would like to work something out at the right payment if possible but was they want a letter from the court saying that they give permission for us to seek help. Will that letter be hard to get? not sure who to call. Also, what about the second mortgage that was included in the chapter 13?

We are trying to see if this could work out because i am sure they dont want the house and we would stay if we could handle the new payments.

Thanks.

[Flamingo]

This is something you need to discuss with your attorney as a modification during your Chapter 13 will alter your financial status and the value of and payment for your house as listed on your present Plan filing. Before you proceed with anything, contact your attorney.

[catleg]

It sounds like, if nothing else, it will stretch out the time you're able to stay in your home.
I am under the impression that most BK courts routinely grant permission for such discussions, rather than cut off communications between debtor and lender.
Usually the loan mod adds the missed payments to the balance, which can be bad if your ch13 plan is paying arrears but it sounds like you are not paying arrears.
Is your 2nd being stripped or is it in the money? If you get your 1st mortgage addressed then you need to strategize about the 2nd.
You should take a hard look at whether there are any terms that they can realistically offer that you can afford.
Have they filed for relief from stay? Sorry to ask so many questions!

[ilbcertain]

When we filed the 13 we included the house and the arrears but we could not afford the payment 7 months into the plan and gave up the house last July. The second was stripped. I have a new job now and if they made an offer that was appealing, we would consider. If we/they decide that an mod is not an option, how far would that put us on the forecloser timeline?

[catleg]

I don't really know, depends on a lot of stuff like your state and how they're coping with the robosigning scandal, the MERS scandal, etc.
You really have nothing to lose and everything to gain by keeping them talking. The 2nd won't really be stripped until you complete your ch13 plan and get a discharge. Also to some degree depends on who your mortgage "belongs to", though that may be hard to figure out, and nobody really is eager to take losses.

[ValleYum]

If we/they decide that an mod is not an option, how far would that put us on the forecloser timeline?

Here in Washington state there is a very finite foreclosure timeline once they start the process.

• Notice of Default issued. FYI: In Washington state, most NODs are not recorded with the county. They are delivered via both certified and regular mail *and* either personally served to you or posted to your home.
  
• At least 30 days after NOD issued, Notice of Trustee Sale recorded with county.
  
• At least 90 days prior to sale date, NTS is published twice. First publication must be between the 35th and the 28th days before sale and the second publication must be between the 14th and the 7th days before the date of sale.
  
• Sale is held.
  
• Purchaser at the sale is entitled to possession of the property on the 20th day following the sale.

If they filed the NOD today, you'd have at minimum 139 days (almost 5 months) before you'd have to face eviction proceedings. Sometimes, they will just file the NOD and wait (we are in the wait part of it now - NOD filed in May). Sales do get cancelled for unknown reasons as well so everyone's experience is a little bit different.

Great timeline here from the Washington state AG's office: http://www.atg.wa.gov/uploadedFiles/...etimelines.pdf

[ilbcertain]

what if the home does not sell?

[ValleYum]

what if the home does not sell?

Do you mean at the auction?

If that is what you mean, this is how I understand it from my attorney & the county auditor's office:

• If the house actually goes to auction at the courthouse steps (location may vary) and a bid is not received that is over the bank's minimum bid; legal ownership reverts back to the bank.
• The house becomes then becomes a REO property.
• You have to be out before the 20th day following the sale or you are subject to eviction proceeding being filed against you. You can try to negotiate for more time in the home with the bank/purchaser (if you do negotiate a later date, get it in writing is what I was told!!). If cash for keys is available, it is usually negotiated in the days immediately an unsuccessful sale (meaning it goes back to the bank).
• Title of the home will transfer out of your name as of the sale date although the actual time needed to record the deed transfer may be longer depending on your county's backlog.

I hope this helps you.

While I am personally comfortable with the veracity of the info I gave above, I do encourage you to check with your attorney to verify it.

[ilbcertain]

Will i be notified of all this by mail

[ValleYum]

Notified of which part via mail?

[ilbcertain]

when it will be auctioned. When we will have to move basically

[ValleYum]

You will get your NOD by both First Class and Registered/RRR US Mail per the RCWs. It is also hand delivered to you or it is posted to a conspicuous place on your house. Ours was on our garage door right by the house number. I was told that the server puts them by the house number then takes a digital photo of it there as their proof of service. Once you get the NOD they can file the NTS after 30 days. http://www.bkforum.com/editpost.php?...03&do=editpost

The Notice of Trustee Sale is published in the 'local' newspaper in the legal section (it is in our local paper here). I don't think they mail you anything then - although you get TONS of mail from people wanting to help you save your house or list it for a short sale so you kind of find out this way, too!

In Washington state you can sign up for free to track foreclosures here: http://www.usa-foreclosure.com

I also check to see if a NTS has been filed with my county tax assessor's website. It is available online here.

Some of the sales go exactly by the days in the link I gave you above. Some lenders just file a NOD and then wait. It all depends. I have started thinning our belongings and packing things we don't use on a regular basis. U-Haul will ship boxes and packing supplies to you postage free if you spend more than $50. FedEx brings them to your door.

Hope this helps you. Check with your lawyer too - since you are in an active Chapter 13, things may have to proceed more cautiously - I truly don't know if there is a difference or not.

Take care and hang in there. I understand the 'not knowing' as we live on standby here...

[greenthinker]

ilbcertain,

Going back to your original post, we too are in Washington State, and Bank of America required a letter from our attorney (not the court) authorizing them to work directly with us on a modification. It wasn't hard to get from our attorney, but of course, your mileage may vary!

Good luck to you!

[ilbcertain]

Thanks for your help. My attorney wrote us a letter. Did you end up modifying the mortgage? Did you have a second on the house? How long was the process and was it difficult? We are with BECU

[greenthinker]

I don't want to sound discouraging when I tell you our experience, so please keep in mind that every situation is different. I am hoping that since you are with BECU, you will have a better outcome.

We have given up on getting our loan modified, and are now planning to surrender the home in our Ch. 13. There are several reasons why we're giving up:
1) We are underwater by about $120K, and B of A has said that they won't do a principal reduction.
2) We have been trying to get a modification for about a year, and they continue to drag their feet. I am almost convinced that this is a deliberate tactic to either get people to give up, or to collect the higher mortgage payments for as long as possible. Meanwhile, we're overpaying for our home by about $1000/month...throwing good money at bad.
3) We like the house, but will not be heartbroken if we have to give it up. There are plenty of nice homes that we can rent for a much more affordable amount.

Anyway, best of luck, and as I said, hopefully you will have a better outcome!