Clarification on late mortgage and ch 7

[HHM]

I'm hearing 2 different opinions of being current on mortgage payment(s). One says if you are not current you will lose your home(even a few days), the other says just as long as you are not three months or more behind. Three months is when the foreclosure starts pre-BK.

I'm trying to figure out which to believe.

Also, aren't the mortgage companies trying to do as much as they possibly can to keep from foreclosing and incurring more loses?

Going into a chapter 7, you need to be caught-up if you want NO RISK of losing your home.

If you go into a chapter 7 behind, the bank CAN lift stay and start/continue foreclosure. Now, if the bank is willing, you can offer them an "adequate protection order" which is a plan you will propose to get caught up (but it has to be reasonable, i.e. 6 months or less (preferably 3 months or less).

Bottom line, if you go into a chapter 7 behind on mortgage, you have a significant risk of the bank foreclosing.

[chad9162]

I'm hearing 2 different opinions of being current on mortgage payment(s). One says if you are not current you will lose your home(even a few days), the other says just as long as you are not three months or more behind. Three months is when the foreclosure starts pre-BK.

My understanding is you have to be current on the loan(s) that cover the value of the house. So if you're 1st Mortgage covers the value of the house then you can't be late on the 1st. Now if the 1st and 2nd cover the value of your house then you need to be current on both. I also believe that this is district specific.

Also, aren't the mortgage companies trying to do as much as they possibly can to keep from foreclosing and incurring more loses?

No, they got their bailout money so really there are no losses. They are being subsidized by taxpayers. If they need more money they'll just ask. Now if we wouldn't have bailed them out maybe the concept "Some money is better than no money" would apply.

If you've read the newest headlines the new federal loan mod programs are giving lenders something like 9 Billion to workout loan mods. I don't think any of the lenders are going to be losing any money!

[chad9162]

Going into a chapter 7, you need to be caught-up if you want NO RISK of losing your home.

If you go into a chapter 7 behind, the bank CAN lift stay and start/continue foreclosure. Now, if the bank is willing, you can offer them an "adequate protection order" which is a plan you will propose to get caught up (but it has to be reasonable, i.e. 6 months or less (preferably 3 months or less).

Bottom line, if you go into a chapter 7 behind on mortgage, you have a significant risk of the bank foreclosing.

While I agree with HHM to a point, I don't think I have that much "RISK." My 1st is $320,000, 2nd is $50,000, and house is worth $220,000. My 2nd would have to payoff the 1st. So they'd take a $100,000 loss and not even get their $50,000.

By all means if they want to I'll just walk away. They created this problem! My neighborhood is going in the toilet, 5 rentals and 2 Bank Owned! Its only gonna get worst.

[hamletsdead]

Just pay your 1st mortgage current. Call them and tell them you will catch up payments in a couple weeks. Or don't call them, and get current. Even if the stay is lifted as to your 1st mortgage they can't foreclose if you are current, as they have no right to foreclose on mortgagees who are not in default of their mortgages. Moreover, they still have to abide by the law of foreclosure in your state -- no state lets banks foreclose on folks who are 2 weeks late in making one mortgage payment. So relax. Chase is retarded, but they don't want to foreclose on your house and lose money if you are willing to catch up and pay the principal balance (esp. since your loan is now worth more than the house would sell for)>