My 1st and 2nd mortgages are both saying they are the 1st. How do I know for sure. If USDA is the 1st then I can't get a loan modification. I've already started a modification with citimortgage which they say they are the 1st. USDA used to be the 1st and somehow it got switched about 2 years ago. But USDA still claims that they are the 1st. I'm confused because I was denied a loan mod back in 2010 because my payments were not more than 31%. Now they are. So if they were the 2nd then why were they able to go that far with the mod to begin with. Why wouldn't they have told me right then and there? Thanks again for all your help.
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Modifying the already existing loan has nothing to do with "who is on 1st and who is on 2nd". The sequence of liens depends upon who recorded 1st and who recorded 2nd and whether or not a lien was mistakenly released or a lender agreed to subordinate their position. You need to go to the county recorder and trace when each mortgage/deed of trust was recorded and whether or not there were any releases.
My experience with the USDA (Farm Agency Service) is that it typically holds a 2nd or even a 3rd position mortgage unless the property had no mortgage on it when the loan was taken out - but that is only my experience.
Des. -
If USDA is the 1st then I would not get a modification because they don't participate with HAMP and I was told that you have to first apply for one with the 1st before you would be considered one for the 2nd. So I guess I better check with the county recorder. Thanks againComment
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Question. . .
Why do you have a USDA loan? Are you a farmer/rancher?
Des.Comment
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Not sure but I do live in a rural area. And also the loan is a federal loan and goes by your income when deciding the interest. I used to get the interest at 4% when my kids were little but now that my daughter still lives with me and works the interest is at 7.375%. Anyways I found out today that first mortgage that recorded was citimortgage so now maybe I can keep the ball rolling on my modification. I also read online that who ever records the mortgage first is the 1st lein holder. Anybody know for sure? ThanksComment
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Well today I received pre-eligiblility for a loan modification on my 1st mortgage. But then I found out that my 2nd mortgage USDA does not have HAMP or anything in place for a modification. Anybody know what can be done with the 2nd since I owe them the most and the one that wants to foreclose in two weeks. Also USDA is a federal loan and can you belive doesn't have a federal mod program. ThanksComment
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Ok, maybe this is because of the wine I am sipping, but I am a bit confused.
We have established that you are not a “family farmer” (got the USDA loan because you live in a “rural” area.)
Are you in a Chapter 13? I ask because you posted under the 13 section but are now stating that the lender (2nd) is going to foreclose in 2 weeks.
If you are in a Chapter 13 has either lender obtained relief from the automatic stay? If not, how does your Plan provide for the 1st and 2nd lenders?
If you are not in a 13 yet, do you plan on filing one?
Also:
How much is the home worth?
How much is owed to the 1st mortgage?
How much is owed to the 2nd mortgage?
Des.Comment
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Hi Des...Originally posted by despritfreya View Post
I am not a farmer. I only qualified because of the low interest they provide according to your income and that I live in a rural area. I waited 5 years on a waiting list.
I am in a chapter 13 only have a year to go in a 55 month plan.
There was a hearing and the 2nd mortgage could obtain a relief after May 9. The judge gave me time to try and work with them but they want a lump sum which I'm not sure I can get. My lawyer says the mortgage will not accept that I put the arrears into the plan to finish it out. Is this my lawyer not wanting to do this or is it really the mortgage company? I thought I could amend the plan without their permission.
I'm not sure what my house is worth now with the market. I bought it for 83000 and 3 years ago I tried to sell but no one was buying and also they weren't getting the financing. At that time they were trying to sell it for 104,000.
1st mortgage I owe is - 16,000
2nd mortgage I owe is - 60,000Comment
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oops...I have the mortgages backwards. It is the following...
1st mortgage I owe is - 16,000
2nd mortgage I owe is - 60,000Comment
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This is a pickle. The lender has already obtained stay relief and you have less than 1 year to go. If the lender does not want to work with you and you cannot get the funds to reinstate the loan to stop the foreclosure, I see one possibility (other than the immediate dismssal of your case and the filing of a new case - probably not advisable).I am in a chapter 13 only have a year to go in a 55 month plan. . .There was a hearing and the 2nd mortgage could obtain a relief after May 9. The judge gave me time to try and work with them but they want a lump sum. . . My lawyer says the mortgage will not accept that I put the arrears into the plan to finish it out. Is this my lawyer not wanting to do this or is it really the mortgage company? I thought I could amend the plan without their permission.
In my opinion, whether or not the lender "accepts" a modified plan is not relevant. It is up to the court. The bk code states that you can “cure any default” and there is case law to support putting post petition arrears into the Plan. For example:
I do not know what the case law in your district states. However, even if modifying the Plan is permissible, since the stay has been lifted you would have to get the modified Plan confirmed BEFORE the property was foreclosed. The confirmation order is binding upon the creditor and, at that point, it would not be able to proceed to foreclose. Unfortunately, it will be very difficult to get all ducks in a row for confirmation before the loss of the home - but maybe it is worth a shot.In re Thomas, 121 B.R. 94 (Bankr. N.D. Ala., 1990)
“It is this Court's position that, when circumstances are appropriate, bankruptcy courts may use their 11 U.S.C. § 105(a) powers to allow debtors to modify Chapter 13 plans via 11 U.S.C. § 1329(a)(1) and (2) to cure post-petition mortgage defaults under 11 U.S.C. § 1322(b)(5).”
Des.Comment
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I don't get it. On March 14th my lawyer answered to the court that I was able to cure any default and that it would be inequitable. OK so then the court had a hearing on April 9th that I didn't know about till I got the letter in the mail that the judge denied and stay shall remain in effect until May 9th.Then on April 11th I get a letter from lawyer that the stay remains in effect until May 9th and then my lawyer says USDA can proceed with a foreclosure. So I called him and he thinks I should try to come up with a lump sum to offer USDA. Why can't they just amend the plan. I'm not sure what the case law states but I live in Wisconsin and its the Western District of Wisconsin. ThanksComment
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I read somewhere that is not uncommon to convert to Chapter 7 while in an active Chapter 13 and then refile another Chapter 13 to take care of any remaining debt. Anybody hear of this?Comment
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I did quick research and did not find any reported case in Wisconsin or in the 7th Cir for or against the ability to add post petition arrears to a Plan. That does not mean there are no cases - I just did not find any.
Sounds like this was the history:
1. Motion filed
2. Response filed on March 14
3. Preliminary (or final depending upon your court's procedure)Hearing held on April 9
4. Judge determined that there was cause to lift the stay but ordered that no foreclosure could happen until May 9th. This does not necessarily mean that the foreclosure will happen on May 9th. It just means that it could not take place before that date. You have to check with the lender for the actual date.
I do not know procedure in Wisconsin. All I can tell you is how our firm would have approached this:
1. Motion filed
2. T/C from me to you "yelling" - what is going on and when can you bring payments current?
3. Response filed - telling court exactly how we would cure the default - either by a catch up agreement with lender or the filing of a Modified Plan (if feasible).
4. Attempt to settle between March 14 and April 9. If unable to work it out AND a modified plan was feasible AND the lender was not willing to continue the hearing to allow for further discussions - file it (the modified plan) before the April 9th hearing.
5. Attend April 9th hearing and tell court the status. Hope that court won't lift stay. The court won't if a settlement was reached. The court might or might not if no settlement but the modified plan was on file.
I guess the point is - we would have had a game plan in place before the hearing in the hopes that the court would not do what the court did in your case. But, one can never guess at what the court will do.
Des.Comment
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I would like to offer USDA 700.00 more in the plan to get settled. My daughter is going to support me for a year. She never moved out anyways and makes 1600.00 net a month. Do you think they will accept this. We both have a stable job and I will work at McDonalds part time if I have to. Just a thought. I'd really hate to lose the equity if I have any. Thanks for your help.Comment
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Unfortunately I cannot answer your question. All I can say is that there is no harm in asking.
Des.Comment
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