second mortgage lien holder ignoring court order?

[tomochan]

This is my final year in Chapter 13 and everything seems to be going smoothly up to this point. I even got my first mortgage modified to a lower interest rate in 2012 and reduced my mortgage payment by almost $500. I am close to completing my chapter 13 and I am getting a little worried because my second mortgage lien holder, which is being paid as an "unsecured" debt by the Trustee for the past 4 1/2 years seems to be ignoring the lien strip order when I get discharged. The lien strip was approved on in December 2009 and the second mortgage was deemed as an unsecured debt. In 2013 my attorney began to receive notices to modify my second mortgage and started forwarding the notices to me. I spoke to my attorney and he said someone at the mortgage coming must have dropped the ball and that since it is such a big company one hand does not know what the other is doing. He suggest I send the court order regarding the second mortgage to the company. I sent it by certified registered mail to several addresses on the notices and the notices stopped. Now as of February 2014 I started receiving a mortgage statement from the second mortgage holder showing the payments received from the Trustee and the balance of the second mortgage, which shows all the payments were placed on the interest. Why am I receiving these statements now? I don't want to keep contacting my attorney about this. Does this mean that the second mortgage holder is not acknowledging the court order and I am going to have a problem getting the lien released? Anybody have a similar situation?

[justbroke]

I would not worry about this at all until your Plan payment have been completed and you are headed to discharge. Upon discharge, you can politely ask your attorney to forward (on his/her letterhead) a copy of the discharge order and the lien strip order. If this does not fix the problem, then your attorney will need to file a Motion to Compel (compliance with the lien strip and discharge order).

As I stated in another thread, accounting for mortgages that are included in a bankruptcy is a very precarious thing. Almost all mortgage creditors treat the mortgage as if nothing happened, only they check a box that they should neither communicate with the debtor nor take any legal actions to collect. This allows their system to reflect what the account would look like if the bankruptcy never happened. That is why payments go into "suspense" accounts and past-due fees accumulate.

I would not even "worry" about this because you have a lien strip order (which does not take affect until discharge) and you are in an active Chapter 13. They can't do anything at this point. Once your case is discharged, your attorney can seek sanctions for violating the discharge order, since the lien strip will then be made enforceable.

I'm surprised your attorney is not telling you exactly what I just wrote. ( If those statements have the words "for information purposes only", or something similar, then they are just that. The creditor is not trying to collect, only inform you of the balance.)

[tomochan]

Thank you so much for your response. This forum has so much information that it somewhat gets overwhelming. However, it has brought me through to this point, thanks to people like yourself, who share a wealth of information. My attorney told me not to be concerned and I trust him very much, but for some reason I needed input from someone, who have been through bankruptcy. Thanks again, "justbroke" I appreciate your help!!

[tomochan]

Thank you for all your help justbroke. I just wanted you and everyone in the forum to know that after receiving my order granting discharge after completion of chapter 13 plan which was entered and signed January 14, 2015, I worried about my lien release. Well today I decided to look on the Maryland Land Records to see what happened to my order granting motion to avoid lien on my second mortgage. Well guess what I found in the land records database: A certificate of Satisfaction signed and dated May 1, 2015 by the holder of second mortgage and Recorded by the Clerk of the Circuit Court on June 6, 2015. (I printed it from the database) So all I have to wait for is the original certificate with the seal and my Chapter 13 will be completely over, right? Thanks to you and the support of everyone here on Bankruptcy Forum for all the support and information.

[justbroke]

I am so happy to read bout the good news. I think a satisfaction (and/or Release of Mortgage) should be sent to you along with the "original" copies of the Note and Mortgage and they should be stamped satisfied or paid (or something like that). I don't think it has any seal on them... at least not in my county (in Florida).

Just keep all your paperwork together. If you did want a "certified" copy of that Satisfaction, you could always pay for one and obtain it from the Clerk.