Problem after discharge

[Stonrmason]

Long story short. Prior to filing BK I had a monthly 2nd mortgage payment of 525.00 with HSBC. HSBC scheduled a payment of 392.00 per month be paid to them during the BK. We made that payment to them every month for 4 1/2 years while we were in BK. We were discharged in Jan 2013 and have made our payment of 392.00 every month.
Now they say our payment is going back to 525.00. They say we applied for a 5yr loan modification in Oct of 08 and the modification has now expired.
We started our plan in Sept of 08 and absolutely never applied for a loan mod.
What is this all about?

[justbroke]

They may have treated the bankruptcy, 60-month plan, as a 5-year modification. Were you underwater at the time? They may have unilaterally decided to modify your payments while the Chapter 13 was active. This would not change your responsibility to pay the terms of the note. Secured creditors are special in that their liens remain effective after discharge (unless your attorney moved to those liens "avoided"). In other words, you still owe them on the loan unless you took some action.

From my reading of your post, you may not have qualified for a lien strip of the 2nd mortgage when you filed. If so, then that means that you may have been underwater, but not enough to make the 2nd mortgage "completely" unsecured (meaning that the 1st mortgage balance was more than the home was worth). If that is the case, then you would need to make payments on the 2nd mortgage through the Chapter 13 -- which appears that you did -- and you would still be bound by the terms in the 2nd mortgage.

As for how the modification happened... I can't tell you. Your (old) attorney may look in PACER and look at the claim that the HSBC filed to see what they asked for. I can't tell you whether this was something your attorney did, in the plan, or the Trustee paid what HSBC "claimed" as the monthly payment.

The only way to know for sure is to ask your old attorney or perform your own audit on the data at 13 Data Center and the claim in PACER.

The fact (may still) remains that the lender has a valid lien and you are obligated to fulfill the terms of the mortgage and promissory note. This is because the obligation to pay the note was not discharged by the bankruptcy.