Clarification on late mortgage and ch 7

[cyn5]

Hi everyone - just wanted to get some clarification. We are slightly behind on our mortgage (we are keeping our house) and hopefully filing at the end of April (trying to pay lawyer and get their fees taken care of). I am hoping to be completely caught up before we file, but "what if" we are not? Our April payment will be about 30 days late (worst case scenario) at the time of filing. If keeping your house, at the time of filing...can you be behind on your mortgage even a week? What would happen if we are a little behind? Or do you just have to be completely caught up by the time of your 341 meeting 30 days later? Thanks:-)

[keepmine]

You need to ask your lawyer how this is handled in your district. You may not need to be current when you file but, you'll need to get current in a hurry.
If you're still paying on debt you are going to discharge, you should stop doing that .

[WC Nurse]

I was wondering the same thing. We filed on 4/3/09 and hadn't paid our 4/1/09 mortgage payment yet. My attorney didn't say anything about it so I didn't think it was a big deal. Now I'm getting worried because I found out that Chase has already filed a Motion for Relief from the Automatic Stay. We're in CA and won't have the money to pay until the end of the month. I planned on being a month behind until my husband goes back to work in about 2 months, at which time we'd be able to catch up. The only way I could catch up now would be to borrow money from one of my friends, which I don't want to do. Any advice? Should I be worried that Chase will try to foreclose on us? We're underwater about $100k so there is no equity if that matters.

[lrprn]

We filed on 4/3/09 and hadn't paid our 4/1/09 mortgage payment yet. My attorney didn't say anything about it so I didn't think it was a big deal. Now I'm getting worried because I found out that Chase has already filed a Motion for Relief from the Automatic Stay.

If Chase has filed for relief from the stay already, then I'd say it was a big deal that you were a few days behind when you filed Ch 7.

It's possible to fight Chase's motion in court but it is likely to cost you more to pay your lawyer to do it.

Should I be worried that Chase will try to foreclose on us? We're underwater about $100k so there is no equity if that matters.

Since you know that Chase is already trying to lift the stay, they *ARE* trying to foreclose on you.

If you are underwater $100K now, please help us understand why you are trying to keep a house that is that far under its market value? Even with some future market improvements, it will take years to recoup that much loss of equity (if ever).

[WC Nurse]

We never intended on giving up our house. If I would have known there was a chance I would lose it, I would have never filed Ch. 7 but our attorney said this was an easy case and there would be no problem. He made it sound like we have nothing to worry about and will be able to keep the house and cars.

There are several reasons why we want to stay here instead of trying to find a rental. First, we LOVE our house, we love our neighbors, street, etc. We've done so many improvements to our home to make it like we wanted, it seems like such a waste to just let it go and start over to where we were 15 years ago. Second, I think it would be hard finding a 4 bedroom rental (there are 4 of us and I need a home office - I work from home) with enough parking (we have 4 cars and a work truck between us) that takes animals (2 dogs) that would be that much lower in cost than what we're paying now.

I've sent 2 emails to my attorney and he hasn't responded yet...probably on vacation while I'm here sweating. If I have to switch to a 13 to keep my house, I guess that's what I'll have to do. I just wish he'd answer me soon. I'll keep everyone posted as to what happens.

[albacore44]

$100K upside down.............sounds like your located in the Inland empire. Thats probably the median for upside down here.

[chad9162]

If you're only a month behind I wouldn't worry. My buddy is like 3 months behind and Chase hasn't really done anything. Just because they filed a motion doesn't mean they're gonna foreclose. At this point they can't talk to you but if the stay is lifted they can negotiate correct? My attorney told me I could stop paying on my 2nd before I file BK....we're also under 120K

[WC Nurse]

$100K upside down.............sounds like your located in the Inland empire. Thats probably the median for upside down here.

You're exactly right albacore44! I am in the Inland Empire...Temecula to be exact. We would have been okay if we never refinanced or took out the HELOC. I could kick myself now. Live and learn...never will I do that again even if I could. I guess I should consider myself lucky....I have friends that bought a new home with little money down and are now $200k upside down.

[WC Nurse]

I finally got an answer from our attorney and feel much better:

Since we are just 1 1/2 weeks late, it shouldn't be a problem.

[sadandconfus]

chad9162 : why did your attorney tell you to stop paying the 2nd? Are you giving up your house? I am underwater as well, but other reasons are kinda forcing me to keep this house after bk7 at least for a couple of years. I would like to settle on the 2nd if i could, but i'm afraid especially after a bk7.

[chad9162]

chad9162 : why did your attorney tell you to stop paying the 2nd? Are you giving up your house?

Yes, we are keeping the house and if you look at this posting it will explain everything....

http://www.bkforum.com/showthread.php?t=35822&highlight=lien+strip

I am underwater as well, but other reasons are kinda forcing me to keep this house after bk7 at least for a couple of years. I would like to settle on the 2nd if i could, but i'm afraid especially after a bk7.

I don't know why you're afraid. If you're significantly underwater (meaning the second mortgage won't get anything after they payoff the 1st mortgage) I doubt they'll foreclose. In my case they'd lose more money foreclosing and paying off the 1st. (1st is 320,000 and the 2nd is 50,000 but house is worth 220,000 or less).

My attorney agreed with this concept but also said they could just wait it out and refuse to negotiate. Personally thats find with me. I'll just treat the house like a rental and then walk away later. Since the 1st and 2nd will be included in our BK, I won't be personably liable.

The banks caused this problem by giving everyone money. People who are staying are getting screwed. My neighborhood has at least 5 rentals and a couple of bank owned now. Not helping my value any. If I'm lucky I'll be able recoup $150,000 in 10 years (not holding my breath). But that only means I'd break even.

What if I don't recoup my losses?? The way I see it, by saving my $400 a month I'm guaranteed to have at least $24,000 in 5 years or $48,000 in 10 years. Can I get the same guarantee from the housing market?

What really annoys me is that most banks aren't doing anything significant when it comes to loan mods....They got they're bailout money so now there's no incentive for them to work with us. I think the bailouts were a huge mistake!

What's really ironic is the banks cause all this by giving everyone money. "Stated income loans" are you serious! They weren't complaining collecting all those closing cost and kick backs....

[sadandconfus]

chad9162: I'm taking my bk7 paperwork to attorney on Monday, because I just got a letter that the bank is send my paperwork to their attorney/trustee for foreclosure proceedings. However, on Thursday I kinda worked out a payment plan on my first, all contingent on me paying by this coming Thursday to reinstate the loan. Two weeks ago the second sent me a letter with the intent to foreclose. The first and second are with the same servicer but i think different investors.

[chad9162]

sadandconfus.....you will need to be current or catch up quickly on your 1st in order to keep the house. I don't know what your mortgages are but for me like I said before My 1st Mortgage is about $100,000 more than the house is worth. This makes the 2nd Mortgage moot.

I don't know if it matters if you have the same servicer or investor. I think it matters how much they're going to lose, if a bank like Chase owns both loans then they might foreclose but then again they might not if you're current on the 2nd.

Since you're filing Bk this doesn't matter but I read some case law that says if both loans are owned by the same investor they still only get one action. That applies in CA.

Also on another post you asked if the 2nd could go to a collection agency. You need to know your states laws on real estate. In CA we're non-recourse, meaning they have to go after the property in most case when the money used was purchase money. In CA they are allow "One Action"...either go after the house or go after you personally. Now if you have a 2nd Mortgage that was not purchase money (money that was not used to buy the house) then they get their "One Action." Once the house is foreclosed the 2nd becomes an unsecured debt and they can seek a judgement against you in order to garnish you wages. Now if both loans are owned by the same bank they still only get "One Action" at least thats what I've read....

So in CA basically the 2nd Mortgage or even 3rd mortgages can't go directly to collection agencies they have to go after the property first. They'd have to payoff the other lien holders. Or they can just wait for market to recover or wait till you sell.

[hamburgervol]

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?

[sadandconfus]

i think the mortgage companies dont care about losing money, i think they just want to screw the people.