Modification denied, automatic stay lifted

[cinderella]

Hi,

I have been trying to contact my mortgage company for 2 mths and no one would call me back. I finally got through to a lady who was less than helpful who told me that my first mortgage is less than 30% if my income so I simply dont qualify. I still have basic expenses that put me in the negative and my Chapter 7 is sitll open. I dont understand the decisions the mortgage companies are making when the house is worth less than what I owe.

I am past due and in the foreclosure process. If I am able somehow to bring it current, will I have to option to just not reaffirm since the automatic stay is lifted and walk away from the house in the future?

I initially told my attorney I would try to keep the home but I did not get any reaffirmation from the mortgage company. Will the debt still be discharged since the automatic stay is lifted?

Will there be paperwork sent to notifiy me of what debts are discharged?

[OhioFiler]

Lifting the automatic stay will allow the mortgage holder to continue foreclosure.

You mortgage will be discharged with all other debts so long as you don't reaffirm the loan and you can then walk away at any time.

Were you behind on your mortgage when you filed BK?

[calgirl67]

In your case I would have filed a Ch 13 if the numbers made it possible to do so.

That being said, once your Ch 7 case is discharged and closed, I would keep contacting the mortgage company and try to convince them they should modify your loan as they will get nothing if you walk...

I agree I cannot fathom why they would want a negative equity house back that they cannot sell rather than give us a small break (still making a profit in the process). Best of luck.

[mtbc]

Yeah, our mortgage company wouldn't give us a break either, and ended up paying foreclosure lawyers and ending up auctioning a way-upside-down house that had been vacant for a year. I repeatedly told them, if they cut us a break about deficiency, we'd do our best to get a good price for them. I wonder if they really didn't believe that I was prepared to just walk away and file chapter 7.

[CCsAreEvil]

I think the reason most mortgage companies would rather just foreclose is because they KNOW you can walk away at any point. Also, you are already behind on your payments. If they just do the foreclosure process, they will get whatever they can at a fixed cost and within months (or a year or whatever).

If they let you ride, there's no guarantee on you making future payments since you can walk away at any point. The risk is 100% on their side since they were BK'd on (obligation to repay note).

[HHM]

This begs the question; if your mortgage payment was really less than 30% of your gross monthly income, why exactly are you behind on it. Granted, I personally believe that having a mortgage payment of 31% is too high, but that is the goal for modifications. If your payment is already below 31% of your gross monthly income, there is nothing to modify, for some reason, you simply can't afford the house.

Realistically, your mortgage should be 20% or less of your gross monthly income.

[Chowder]

HHM, she said, first mortgage. There may be a second or third....

The risk is 100% on their side since they were BK'd on (obligation to repay note).

The risk is 100% on their side BK or not.

Hi,

I have been trying to contact my mortgage company for 2 mths and no one would call me back. I finally got through to a lady who was less than helpful who told me that my first mortgage is less than 30% if my income so I simply dont qualify. I still have basic expenses that put me in the negative and my Chapter 7 is sitll open. I dont understand the decisions the mortgage companies are making when the house is worth less than what I owe.

If it makes you feel any better, those that "qualify" for a mod still aren't getting them. Compared to the loan mod process a BK is a cake walk.

[OhioFiler]

In your case I would have filed a Ch 13 if the numbers made it possible to do so.

That being said, once your Ch 7 case is discharged and closed, I would keep contacting the mortgage company and try to convince them they should modify your loan as they will get nothing if you walk...

I agree I cannot fathom why they would want a negative equity house back that they cannot sell rather than give us a small break (still making a profit in the process). Best of luck.

Well, there may be insurance on the loan. There are a host of reasons why a lender chooses not to modify a loan. The biggest reason is they don't have to do so.