Loan Modification While Current--Is It Possible?

[WeIzBankrupt]

We filed Chap7 and got a letter from Wells Fargo in regards a possible loan modification b/c of our financial difficulties. However we are current and also current on our HELOC and are keeping the home.

First will they do a modication if im current?? There wont be a reaffirm so I have to stay current so they dont forclose right?

Second will my HELOC be discharged? We did a 80/20 loan so the HELOC is the 20 part....

[DeadManCrawling]

I cannot speak to much, except this:

WF has no need to offer a mod. It is strange, in fact, that they did so. You are no longer responsible for the debt in any way. This could be the so-called "back-door" reaffirmation, which would probably only benefit the bank. Or so they think. If you later defaulted and they sued for a deficiency or tried to enforce the contract, you could always make a legitimate claim that the debt had been previously discharged, so there is no claim in the first place.

On the other hand, if they actually are willing to change the terms to benefit you, I can see where it is enticing. Not sure I would do it. I certainly wouldn't do it without TONS of thought and probably the opinions of an attorney or twelve.

Best,

-dmc

[WeIzBankrupt]

I cannot speak to much, except this:

WF has no need to offer a mod. It is strange, in fact, that they did so. You are no longer responsible for the debt in any way. This could be the so-called "back-door" reaffirmation, which would probably only benefit the bank. Or so they think. If you later defaulted and they sued for a deficiency or tried to enforce the contract, you could always make a legitimate claim that the debt had been previously discharged, so there is no claim in the first place.

On the other hand, if they actually are willing to change the terms to benefit you, I can see where it is enticing. Not sure I would do it. I certainly wouldn't do it without TONS of thought and probably the opinions of an attorney or twelve.

Best,

-dmc

Ya Im surprised myself. I have no idea what thay can do for me, guess I will have to wait and see if they do.

[PoorGrammyinBK7]

I'm not an attorney, but I would think that if you sign any agreement to pay the debt - discharged or not, you have just reaffirmed that debt. I'd be interested to hear from attorneys on this one.

[akame5150]

I discharged my chapter 7 in April of this year. I have never been late on any of my payments.

I contacted my lender, Wachovia (who is now owner of WF) and filed paperwork for a loan modification. They accepted and lowered my principle as well as fixed my rate for the life of the loan.

After the BK, I never reaffirmed the debt. I just kept paying. When I got the loan modification contract, it specifically said this loan mod was NOT reaffirming the debt. I was surprised by this, but very good with it.

I did not have a second or HELOC so I can't tell you what will happen with that.

What I will tell you is that a loan mod is very much a reality even if you are current and filed a chapter 7. The loan mod will depend on your income, expenses and a very detailed letter of explanation.

Good luck to you.

[HHM]

I discharged my chapter 7 in April of this year. I have never been late on any of my payments.

I contacted my lender, Wachovia (who is now owner of WF) and filed paperwork for a loan modification. They accepted and lowered my principle as well as fixed my rate for the life of the loan.

After the BK, I never reaffirmed the debt. I just kept paying. When I got the loan modification contract, it specifically said this loan mod was NOT reaffirming the debt. I was surprised by this, but very good with it.

I did not have a second or HELOC so I can't tell you what will happen with that.

What I will tell you is that a loan mod is very much a reality even if you are current and filed a chapter 7. The loan mod will depend on your income, expenses and a very detailed letter of explanation.

Good luck to you.

This, so far, is very much an exception to the rule. Technically, there is no requirement that you be behind on your mortgage to get a loan modification. However, the reality for nearly 95% of people out there is the bank reps are telling them they need to be behind. The primary reason being, the bank has no incentive to put any resources toward doing a loan mod for someone who is current on his mortgage.

Also, it is hit or miss with loan mods post BK, many people are getting turned down, and the "stated" reason being that the debtor did not reaffirm the mortgage in their chapter 7 BK. But again, there is no requirement that you reaffirm and there is no legal reason why a non-reaffirmed mortgage could not be modified.

With loan mods the best advice is, hope for the best, but prepare for the worst. Most loan mods are denied or ultimately fail.

[SPalin]

I was very interesting in a loan modification and was current with my mortgage (was WAMU now Chase) on 6/2/09, but when I contacted Chase was told I had to be late and I should skip a payment, I had already sent the June payment. Downloaded and faxed paperwork in July (missed July payment). Called Chase in August received the packet from Chase and resent as requested (again was instructed to be late, skipped payment). End of August called Chase and was told that I needed to resend paperwork as they have not received it... customer service is terrible! Re-faxed paperwork and then was contacted that I needed to be current??? Then I received my "Trial Offer" from Chase... I was to send in 3 post dated checks for $160 more than my monthly payment! That is when I got an attorney and she said don't pay it! If I did then they would say why should we modify your loan as you can pay more than what your payment is (she has 3 other Chase customers go through the same thing). I was interested in staying in the house as I don't like the thought of moving, BUT after dealing with Chase's customer service, moving is not that bad of idea! Since my house is worth 53% less than the loan value and it will be over 15 years before it is worth anywhere near that... I will get a few months of free rent money to save for the move!!! Thank you Chase!