Can't seem to get them to modify me, is a Ch 13 an option as a last resort?

[indeep59]

Trying to desperately get Bank of America to modify my mortgage, was in default but things have improved and will even get better (inheritance) in the near future.

I've applied 4 times for a mod, actually got trial payments once but they were way too high to make month to month.

I'm probably around 55k in arrears. I hate to do a 13,just went through a 7 2.5 years ago that was discharged. The house is worth keeping, custom home that I built and sunk a lot of money in back in the day. Very close to break even since my second mortgage was forgiven in the DOJ settlement.
However my first is a Fannie Mae loan and there aren't many programs with them like that.

I had a HAMP, so this will be my second mod attempt. I wish I could have kept going with the the HAMP but it was unavoidable to default. Now, I'm married and looking at a nice inheritance (well my wife's but she wants to use it on this house, and no we're not waiting for someone to pass, but was promised it due to selling of some property) coming in maybe a year or two so just trying to hang on till then.

If we could make payments on arrears, plus the mortgage, (I assume it would be the last amount we were paying before default or do they try to modify when dealing with a 13?), it would be tight but doable and worth the sacrifice.

Opinions would be appreciated.

Thanks.

[justbroke]

Every indicator you just listed, makes me want to just say no deal. You are writing that you will just make it by with the payment and arrears. You haven't even discussed your attorney fees and the 10% Trustee Fee on top of all that. Even if you are $55K in arrears, that's a $1,000/month payment all by itself (including the Trustee 10% fee) in a 60-month plan. That doesn't include any priority (IRS/State tax) debt.

Your inheritance could be property of the estate. If you have other debt (credit cards, unsecured debt, vehicles, etc), then those must all be part of your Chapter 13 and your payment would be set to pay 100% of that debt over the life of the plan.

Your particular circumstances really need a much closer look by a bankruptcy (and asset protection) attorney. I know you feel you put your life into your home, but the property (frame, stucco, wood, glass, and even hardwood floors), is not really "home". I'm only asking you to step back and take a much closer financial look at what you just wrote. I don't want you to scrape by, and re-affirm (by keeping it in plan), this property only to have you on here 3 years later. You should not want that either.

Just how close is "close"? Was this a real appraisal done? Remember, you need to add the arrears to the balance to calculate the "walk away" number. If you're already 10% underwater and the $55K puts you another 10% under... it may be time to re-evaluate the value.

[indeep59]

Thanks for the reply.
Again I stated this was a last resort idea, certainly don't want to go down this route if there are other ways of achieving the end goal of keeping the home.

The arrears added on to the value of the home puts me at break even with comps in my area. If I paid the arrears back (if only I had the inheritance now) then I'd actually be ahead, confidently.

I may try to get an "advance" on that lump sum if possible as another option too, but don't want to count on it, nor do I even want to have to ask for it. I got here on my own and I'm going to crawl out of it on my own if I can help it.

The mortgage payment plus the arrears and the fee's you mentioned, yes it would be extremely tight, so probably not a good chance I'll get approved for it anyway, but that's why I asked the question.

[HHM]

What is the income source here?

Is your income better or worse than when you had the mods? Modification is probably out the window at this point, if you have 2 broken mods previously, and with $55K+ in arrears, you are pretty much done with the modification route. It doesn't sound like you can do a HARP II refi because you are not current on your payments.

So, chapter 13 is your ONLY option to keep the home (no last resort about it, you are already here), but as JB points out, it sounds like the income does not exist to really do it.

Let's put some real numbers on this, what does "tight but doable" even mean. Here is my rule of thumb for "save house" chapter 13's. The debtors income must at least be "double" the mortgage payment and chapter 13 payment for "above median" debtors. For below median debtors, income must be triple the mortgage payment and trustee payment. If that is not where you are, then chapter 13 is pretty much a non-starter.

[indeep59]

No I had been given one mod, now trying for another. I defaulted because my original mod was miscalculated with escrow so when it went up $600 about 6 months in is when it started causing me to fall behind. I also was single at the time.

Only because my wife (and me too of course,but at peace with letting it go if I have to) wants me to really keep the house is why I'm trying, and her income affords us to be able to stay here, with a reasonable payment.

I was paying by myself 2300 per month, but couldn't handle the 2900 it went up to. So with the two of us, I'm figuring 2900 would be ok.

Now kind of confused on your two examples.
Example one would be about 7k per month right? 2x mortgage plus approx 1000-1200 p/mth in arrears,fee's etc?

We are right about there.