Loan Modification right after BK7

[illinois2009]

Anyone knows if Loan modification is allowed if you just discharged chapter 7?
I just filled but I will try to reduce my mortgage payment right after (IF) discharge chapter 7.
My bank is bank of america, any experience with them?

thanks

[HHM]

A BK doesn't automatically disqualify you from a modification, but at the same time, I haven't heard of anyone getting a modification after BK.

[illinois2009]

would be bad, i thought i could reduce my mortgage payments reduced later this year too.

[HHM]

What are the terms of your loan and is your home worth less than what is owed?

[illinois2009]

I have an 5 arm as int only and second is a line of credit, o owe total 360,000 to bank of america on both mortgages and i think it is worth 320,000. just filed 7 and meeting is may 15. i pay all interst right now and would be nice to have a bity lower payment with principal with 30 years fix loan.

[HHM]

What is your current interest rate?

In any event, your situation is difficult. The reality is, any modification will probably lead to an increase in your monthly payment not a decrease unless your current interest rate is exceptionally high.

You need to figure out two things
1. Is your loan backed by Fannie Mae/Freddie Mac?
2. Is your current monthly payment more than 31% of your gross monthly income.

If you answer yes to 1, then you may have a shot at a refi (but I wouldn't hold my breath because of the BK). If you answered no to #1, you are dead in the water for a refi. If you answer yes to number 2, you may be able to get a modification, but again, the BK will probably complicate things.

Visit http://www.makinghomeaffordable.gov/
For more info.

But candidly, you should consider walking away from the house, assuming your valuation is correct (if I were you, I would get a real estate agent to give you a market analysis), you are not terribly negative, but at the same time you are not paying any principal toward the loan. If the house is worth less than what is owed on the 1st mortgage, you may want to consider flipping your BK to a chapter 13 and stripping the second. I think long term, you are probably better off simply walking away from the house. Since you apparently qualify for a chapter 7, with a $360,000 mortgage, I can only imagine the mortgage payment takes up too BIG a chunk of your monthly income for you viably hold on to the house.

[illinois2009]

well my loan is with freddi mac and i am over 42%, with 7 i can get ride of 35,000 credit card and then i can figure out a way to reduce my balamce or payment. even same payment with P/I is better than interst only. my rate is good (5.875) but it is an arm and i still have 3 years left. my second loan has only payment of $100 with 25,000 balance. my property tax is killing me but i do escrow, it is $8,100 each year.

[pcnet21]

A BK doesn't automatically disqualify you from a modification, but at the same time, I haven't heard of anyone getting a modification after BK.

loan mod is nothing to do with credit..it is all about income and expense. If you got discharged, you should be good to go.

Actually, you are better since your loan belongs to Freddi

[illinois2009]

thank you, it would be nice to reduce my mortgage after all credit cards gone so maybe i be able to save some money.LOL

[HHM]

loan mod is nothing to do with credit..it is all about income and expense. If you got discharged, you should be good to go.

Actually, you are better since your loan belongs to Freddi

True enough, but loan mods are still discretionary on the part of the lender, even if you qualify, the lender is not forced to give you a loan mod. Candidly, I think you are fighting uphill on this one, there is obviously no harm in trying, but you should have a plan in place if you don't get the mod.

[illinois2009]

well, if not i would have to keep making payment and refinace in two years with FHA. Just hope rates are still low then .who knows.

[pcnet21]

True enough, but loan mods are still discretionary on the part of the lender, even if you qualify, the lender is not forced to give you a loan mod. Candidly, I think you are fighting uphill on this one, there is obviously no harm in trying, but you should have a plan in place if you don't get the mod.

That's correct..it is investor's choice but if you can show your financial hardship, most likely they will do the mod.

You did not include your 2nd when you file Chap7?

[ShouldWeFile]

You did not include your 2nd when you file Chap7?

"stripping 2nd liens is not done in this jurisdiction" is the quote I received from attorney's who practice exclusively in BK's in IL...

Makes no sense to me - if it's unsecured, it's unsecured!

[pcnet21]

"stripping 2nd liens is not done in this jurisdiction" is the quote I received from attorney's who practice exclusively in BK's in IL...

Makes no sense to me - if it's unsecured, it's unsecured!

That's what I thought...You should talk to other Attorney for verify that..

I settle with 2nd Mort before file Bankruptcy..$1 per $.20 which I should wait for bankruptcy...that time I did not think about file Chap7.

[biotechsolution]

"stripping 2nd liens is not done in this jurisdiction" is the quote I received from attorney's who practice exclusively in BK's in IL...

Makes no sense to me - if it's unsecured, it's unsecured!

You can only strip your 2nd in a chapter 13. Not a 7.