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Lender Demanding Money While in Active BK

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    #1

    Lender Demanding Money While in Active BK

    Does anyone see anything wrong with a mortgage lender demanding a down payment with their loan modification proposal while the debtor is in active bankruptcy (and no Motion for Relief of Automatic Stay was filed)?

    It seems the lender should file the Motion for the Trustee to approve and THEN ask for money or wait until after discharge. I thought the whole idea of the Automatic Stay was to halt any collection activity. Am I missing something here?
    Filed Non-Consumer Chapter 7: 07/31/2009
    341 Hearing: 09/03/2009
    Last Day for Creditor's Objections: 11/02/2009
    Discharged! 11/03/2009 CLOSED! 01/05/2010
    Tags: None
    #2
    Originally posted by SleepWellNow View Post
    Does anyone see anything wrong with a mortgage lender demanding a down payment with their loan modification proposal while the debtor is in active bankruptcy (and no Motion for Relief of Automatic Stay was filed)?

    It seems the lender should file the Motion for the Trustee to approve and THEN ask for money or wait until after discharge. I thought the whole idea of the Automatic Stay was to halt any collection activity. Am I missing something here?
    If they are listed on the creditor matrix, then they are violating the automatic stay and should be sued.
    .

    Comment

      #3
      bellee is right on the money here. If you have them listed on your creditor matrix, then they are violating automatic stay and you have grounds to sue them.

      It's a home run case for your lawyer too and $1k in your pocket.
      My comments are solely based on my opinion. The information and links that I have
      posted are provided solely for informational purposes, and do not constitute legal advice

      Comment

        #4
        Thank you for the responses. They are in my creditor matrix. I was in a trial mod with them prior to filing. Once I filed BK, they cancelled the trial mod. They then told me their attorney filed a Motion for Relief of Stay. My attorney confimed they hadn't. Time after time they told me they did. After my 341, they said I could apply for a loan modification. They approved the mod but said I had to send in a down-payment with the signed and notarized paperwork. Written into the mod agreement was reaffirmation odf the debt. I told them I wasn't discharged yet. They said to send in the money and paperwork and they would finalize my mod after the discharge (which I did). Much to my surprise, the very same day they received the money, their attorney filed a Motion for Relief of Stay. Seemed odd to me, especially since my discharge was due in a few days. Now I'm wondering if they discovered the attorney HADN'T filed the Motion and they shouldn't of demanded the money and required the reaffirmation while I was in active BK. I had no choice but to send the money in prior to my discharge or they would withdraw the mod. There's something that just doesn't seem right to me.
        Filed Non-Consumer Chapter 7: 07/31/2009
        341 Hearing: 09/03/2009
        Last Day for Creditor's Objections: 11/02/2009
        Discharged! 11/03/2009 CLOSED! 01/05/2010

        Comment

          #5
          Which sneaky bastard lender was it?
          My comments are solely based on my opinion. The information and links that I have
          posted are provided solely for informational purposes, and do not constitute legal advice

          Comment

            #6
            What exactly is the problem? Is this loan mod w/reaffirmation something you want? What do you mean by downpayment?
            Well, I did. Every one of 'em. Mostly I remember the last one. The wild finish. A guy standing on a station platform in the rain with a comical look in his face because his insides have been kicked out. -Rick

            Comment

              #7
              We do want to keep the property. Of course, we would rather not reaffirm, but were required to in order to receive the loan modification. They worked the figures...added some of the late payments to the balance, added past and future tax payments to the balance, forgave some debt, and came up with an amount to send to them with the signed mod calling it a "down-payment".

              It seems to me, the lender needed to either file a Motion of Relief of Automatic Stay or wait until we were discharged to demand payment for this mod to go through. They had us over a barrel. Sign, reaffirm and send in the money, or lose your house to foreclosure.

              I'm having an attorney look at this. Will keep you posted...
              Filed Non-Consumer Chapter 7: 07/31/2009
              341 Hearing: 09/03/2009
              Last Day for Creditor's Objections: 11/02/2009
              Discharged! 11/03/2009 CLOSED! 01/05/2010

              Comment

                #8
                Originally posted by SleepWellNow View Post
                We do want to keep the property. Of course, we would rather not reaffirm, but were required to in order to receive the loan modification. They worked the figures...added some of the late payments to the balance, added past and future tax payments to the balance, forgave some debt, and came up with an amount to send to them with the signed mod calling it a "down-payment".

                It seems to me, the lender needed to either file a Motion of Relief of Automatic Stay or wait until we were discharged to demand payment for this mod to go through. They had us over a barrel. Sign, reaffirm and send in the money, or lose your house to foreclosure.

                I'm having an attorney look at this. Will keep you posted...
                Very good about the lawyer looking at this. However, you are requesting this mod. They have a right to ask for their expenses or they may even call it a down-payment, or closing costs. What is the difference? I don't see them in sin. Explain to me what they are doing wrong if you requested it? It (so far as Govmint lets us) is still a free market. You could negotiate with them. 'Hub
                If I knew it all, would I be here?? Hang in there = Retained attorney 8-06, Filed 12-28-07, Discharge 8-13-08, Finally CLOSED 11-3-09, 3-31-10 AP Dismissed, Informed by incompetent lawyer of CLOSED status, October 14, 2010.

                Comment

                  #9
                  Since your case is now discharged this is probably moot. You would have to re-open the case to ask for sanctions...not sure how big a hassle that would be.
                  7-2-2009 Filed
                  8-28-09 341 Concluded, no assets
                  10-28-09 DISCHARGED/CLOSED!!!!

                  Comment

                    #10
                    Hold on, the lender is asking for a down payment on the loan modification. They way I see it they can't ask about collecting a debt while you are in bankruptcy protection but they aren't asking about collecting on the loan.

                    I think they are discussing a new loan so that you can keep the house. They do have the option of just taking the asset if you won't or can't pay the terms in the original agreement (after the bankruptcy is discharged). The reality is that they really won't be too willing to deal with you if you start claiming they are violating the stay... They will just refuse to take anything other than a re-affirmation with you being current or bringing the note currert.

                    The OP has said that (s)he did want to keep the house.

                    Comment

                      #11
                      Always wondered why most lenders stop the mod process when a person is in bk. Now I know...

                      Comment

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