Being current on mortgage(s) and filing Chapter 7

[liboton21]

Do you really want to keep a house that is $200k under water? You could do a lein strip in a ch 13. Is the mortgage doable if you include the 2nd in BK?

Yes, mortgage is doable if 2nd lien is strip. I will talk to the lawyer you recommended. Thanks.

[toomanycards]

Current means that you are not even 1 day past due and that you don't have any other issues like escrow, taxes or insurance.

[justbroke]

Wow, what a sentence. In any event, they do allow that grace period, but the grace period is usually not 26-27 days. If you look at your mortgage/note, the grace period is usually 10-15 days. The 30 day mark is for when the "lateness" is subject to being reported to the credit reporting agency.

Remember, whether a lender forecloses or not... is actually up to the lender. They are not required to do it at all. If you're running 26-27 days behind, you could have an issue, but you won't know until discharge. If the bank files a motion for relief from the automatic stay, that's pretty much an indication that they think you pay late.

It may be going smooth, you just can't tell. It is very typical for lenders to turn off all on-line access to your account. This is because they don't want to accidentally send you a bill, because that would be violation of the automatic stay. The only real way to tell if the lender is mad at you... is if they file that motion for relief from the automatic stay. Otherwise, you are good to go!

[toomanycards]

The only real way to tell if the lender is mad at you... is if they file that motion for relief from the automatic stay. Otherwise, you are good to go!

[liboton21]

I was also in current modification, will they stop the mods while I'm in BK?

[OhioFiler]

I was also in current modification, will they stop the mods while I'm in BK?

The auto stay stops all activity. Besides you can't modify a discharged debt. It doesn't really exist.

[justbroke]

From my reads, the lenders will usually file the motion for relief from stay (MRFS) as soon as possible. Sometimes this is before the 341 Meeting and sometimes afterward. What did you put on your Statement of Intentions? Surrender or Re-affirm? If you marked it as surrender, this will usually trigger them to start the MRFS as quickly as possible so that they can proceed with foreclosure.

[toomanycards]

From my reads, the lenders will usually file the motion for relief from stay (MRFS) as soon as possible. Sometimes this is before the 341 Meeting and sometimes afterward. What did you put on your Statement of Intentions? Surrender or Re-affirm? If you marked it as surrender, this will usually trigger them to start the MRFS as quickly as possible so that they can proceed with foreclosure.

reaffirming...not sure if it makes a difference but I am filing individually as all the credit cards are/were in my name only…hubby was an AU on two of five of them…but both our names are listed on the mortgage note…also, being underwater by $30,000+ I'd think they would not want the house and hope that we continue making payments, even if a bit late...yes?

[justbroke]

also, being underwater by $30,000+ I'd think they would not want the house and hope that we continue making payments, even if a bit late...yes?

It's not that simple. You may have PMI (private mortgage insurance) on the home. It may actually be worth it for the bank to foreclose, as they still get all their money. Also, never assume that because you are underwater a bank won't foreclose. They'd rather not, sure, but they'd also rather have the toxic asset off their books!

I think you're in good shape right now. Since you are paying, although a little late, that may be good enough for the bank.

[toomanycards]

It's not that simple. You may have PMI (private mortgage insurance) on the home. It may actually be worth it for the bank to foreclose, as they still get all their money. Also, never assume that because you are underwater a bank won't foreclose. They'd rather not, sure, but they'd also rather have the toxic asset off their books!

I think you're in good shape right now. Since you are paying, although a little late, that may be good enough for the bank.

Thanks and I hope it is good enough…now that we are not paying the credit cards hoping to be caught up within a few months or so…oh, and we do not have PMI…thanks again

[StartingOver08]

Actually, you may have PMI and not know it. There are two ways PMI can be paid, either by the borrower or by the lender. If you loan was orginated after 2000 AND if you and not paying PMI in your mortgage, then your lender is most likely paying for blanket coverage. PMI is insurance in case of borrower default. It is very rare, no matter how low your loan to value was at time of the origination, for there to be no PMI on a loan originated within the last decade. The only way to know for sure is to send a RESPA letter to your servicer and ask who pays the PMI and ask who is the insurer of record. Google RESPA + Qualified Written Request and you will get sample letters.

Because of PMI the lenders prefer to foreclose rather than work with you toward a mortgage modification or a short sale. Be careful with your mortgage payments - if you ever get past that 30 day mark you will have to make two payments together to catch up....

[liboton21]

I am on the same boat with toomanycards the only difference is I am 300K underwater but with an affordable mortgage after BK since all my CC will be cleared. A 3.25% fixed for 28 years but the only downside escrow was not included so I will still have to pay for the prop tax. Eventhough I have an active modifications for HAMP (31% of gross for affordability thru NACA) I 'm not sure if this will affect my filing for loan modifications to 2%. I am torn to either walk-out or keep. It's a 4200 sq ft homes but under water..ARGGHHH!

If I don't reaffirm will BofA foreclose even I am only a month late? I did not even qualify for BK13 since my means test is still negative for five years.

Thank you everyone for all the response.

[OhioFiler]

I am on the same boat with toomanycards the only difference is I am 300K underwater but with an affordable mortgage after BK since all my CC will be cleared. A 3.25% fixed for 28 years but the only downside escrow was not included so I will still have to pay for the prop tax. Eventhough I have an active modifications for HAMP (31% of gross for affordability thru NACA) I 'm not sure if this will affect my filing for loan modifications to 2%. I am torn to either walk-out or keep. It's a 4200 sq ft homes but under water..ARGGHHH!

If I don't reaffirm will BofA foreclose even I am only a month late? I did not even qualify for BK13 since my means test is still negative for five years.

Thank you everyone for all the response.

If you file C7 and get your fresh start, you'll start fresh $300,000 in the hole.

[justbroke]

I am on the same boat with toomanycards the only difference is I am 300K underwater but with an affordable mortgage after BK since all my CC will be cleared.

I don't know why a person would be allowed to reaffirm a mortgage that is $300K underwater. That is not in the best interest of the debtor.

[liboton21]

I don't know why a person would be allowed to reaffirm a mortgage that is $300K underwater. That is not in the best interest of the debtor.

Do you mean the trustee would not allow the reaffirmation or the bank?