Loan modification of mortgage and ch7

[cfgdag]

5 weeks ago we submitted a loan modification package to Chase for our mortgage. I called last week and it had not been submitted to a "specialist" yet and said I probably won't hear back for 90 or so days. I am pretty confident they won't help me...since I am current on my payments.

Last week I met with an atty regarding bk (chapter 7)...and forgot to mention that I submitted for a loan modification. Should I call Chase and tell them "nevermind" or just let it ride out? Do I need to call them and tell them I am filing for BK in a few months? Will a loan modification effect me filing for bk? I anticipate filing for bk by Sept 1 and I highly doubt I will hear back from Chase before then.

[destitute]

Hi cfg
FWIW, I filed the packet for chase back in early March. I just received this week a letter saying basically "thanks we got it...we'll be in touch". If they do get back to me within 30 days as they say they will I'll be surprised. I have heard that if you file for BK they halt the modification. I don't know if that applies if you are already in your 3 month trial period or not.

good luck!

[reeltrouble]

take this for what it's worth, just my .02.... I work in loss mitigation for a mortgage company, i.e. - mortgage modifications. Once an applicant files BK, at least for us, it goes to a whole 'nother department, and they are much, much stricter on approvals. Now, I will disclaim, I do not work for Chase, and do not know how they work. Also, I am, personally, much more lenient, and would rather see the modification get approved, but not sure how much that factors in...

For anyone seeking a mortgage modification - be open and honest with your assigned rep. Give them an honest hardship letter, and be as truthful as you can regarding your income and daily expenses. If you over or understate, sometimes it can jeopardize getting approved. Make sure to provide proof of all your income, and everything you are asked for.

That said, I'm off on a tanget... Good luck!!

[last2cents]

not to take anything away from the OP - but reeltrouble, I'm curious about something.

I have NOT yet filed, but I have been through the modification process on both my first and second. Mods both approved, first payments made on them already (these are not trial mods - they were OK'd out the gate).

I have no intention of giving up the house, and will continue to make the payments according to the mod agreements - what's going to happen at my lenders once I file??

[reeltrouble]

probably nothing, as long as you reaffirm... It kind of depends on the company, but where I work, once the mod is done, its done. When the docs are signed, and the 1st payment is made, it's yours. So, if you file the day after your 1st new payment, and you reaffirm, it probably wont matter at all, since you are going to honor the terms you agreed to

[last2cents]

my lawyer is advising me not to reaffirm - just keep making the payments.

I've also heard that my 1st lender (Wachovia) doesn't reaffirm, and I'm not sure about the 2nd.

[reeltrouble]

I don't claim to be anything near an expert... but I've never heard of a company not reaffirming... Why would they NOT want you to pay them, if you are offering to do so, at the terms they agreed to?

then again, I'm not a big Wachovia fan, since they've been bought by Wells Fargo, but I can't speak from personal experience

[hamburgervol]

I talked with the Executive Team with Chase last week(very nice people). The person I spoke to said that I could go ahead and submit the paper work for a mod. He said that it takes a few months anyway and that the paperwork would be in their hands when I am discharged. I said nothing would be modded during active BK.

[last2cents]

I don't claim to be anything near an expert... but I've never heard of a company not reaffirming... Why would they NOT want you to pay them, if you are offering to do so, at the terms they agreed to?

then again, I'm not a big Wachovia fan, since they've been bought by Wells Fargo, but I can't speak from personal experience

I got that info from a different board....another Wach loan holder said that they refused to re-affirm.

I don't get it either - but hell, if they won't, they're cutting off their noses to spite their faces.

Like I said, I'm perfectly willing to do that, even though I'm upside down on the house. Wachovia dropped 60K off my principal, and if I didn't have the 2nd, I'd be even more rabid to reaffirm with them. I understand my lawyer's position though.

As far as the HELOC is concerned - they were more than willing to modify, but (and this truly sucks for them) even with the prin reduction on the 1st, I'm still underwater.

What I'm hoping is that they will offer a settlement after discharge. Assuming of course, that I get a discharge.

(and as to why I'm hanging on to the house, being underwater, ...#1 - my business is now running out of my garage and spare bedroom and #2 - I have dogs. Big dogs. Rentals for me, at the very least, will be pretty thin on the ground.)

[miozelous]

Can i add a twist to loan modification. I own 50% of my house. We did not escrow any taxes and can no longer pay them (9000 a year) Have asked Citimtg to escrow in april and filed in june. Spent more time talking to India and can not get an answer. Never been late on payment and want to reafirm the house. Any toughts?

[anmartin31]

I am in a trial modification, I cant file CH7 until the 3 month trial is finished. I stupidly mentioned at the start of the modification process that we had retained an attorney for CH7, it almost ruined everything and I had to convince this I would not file until after the modification was complete. IMO the banks wont deal with you if you are filing, its best to have the modifcation complete before filing. We started the modification process in January we finally heard back at the end of June that we were approved so its a long drawn out process. I was also told that to get a modification you have to be 31 days behind, if you are current it doesnt prove that you are in hardship.

[cinderella]

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[cinderella]

They might. When I tried to modify my mortgage last year, everyone told me that the Modification Dept. WOULD NOT help me because my interested rate was only 5.75%. However due to job loss of my husband I was $6300 behind - about 4 mths with fees and I needed to be current to file Chapter 7. The only thing I was looking for was to move the past due balance to the end of the mortgage so I can be current before filing for bankruptcy. "realtrouble" below is right, you have to give a very honest hardship letter, tell them you want to keep you house and that you can afford to keep it if you receive this modification. Mine took 90 days but that time when by faster than I realize.

[cinderella]

BK attorney is telling I have the option NOT TO REAFFIRM

My BK attorney is telling I have the option NOT TO REAFFIRM since my house has negative equity. He said this way the debt will be discharged, I can make voluntary payments and I can walk away from the house at anytime. He said I can later get a modification, reaffirm and then get a lower payment. He said even if you don't reaffirm, the house is still yours and they cannot foreclose unless you don't pay via the normal foreclosure process. I did not think about this until now. Does anyone have any thoughts on this?

[ShorterSN]

My BK attorney is telling I have the option NOT TO REAFFIRM since my house has negative equity. He said this way the debt will be discharged, I can make voluntary payments and I can walk away from the house at anytime. He said I can later get a modification, reaffirm and then get a lower payment. He said even if you don't reaffirm, the house is still yours and they cannot foreclose unless you don't pay via the normal foreclosure process. I did not think about this until now. Does anyone have any thoughts on this?

This is exactly what our lawyer told us. We originally intended to keep our home, so it sounded fine. Later, when we realized we couldn't, it makes us able to walk away. In theory, you could keep paying for two years, clean up your credit and continue making payments (no, they can't take your home if you keep every single one on time), then reaffirm on sturdier bargaining ground. Or even just reaffirm, then refinance with someone else at a better rate. Sounds like a good plan if you can afford it and want to keep your home