Question about home modification and BK

[LizardTail]

My home modification will be finalized on March 1, (just around the corner). Today I received a FED EX from them requesting that I fax to them my last two bank statements. They requested FAX since the trial period ends March 1st. This is all good a fine and I will fax them tomorrow.

HOWEVER, I meet with my attorney to sign the papers for filing BK on Thursday, Feb. 25. I have read that once the mortgage company hears BK, that the modification flies out the window and you start over.

Since I am so close to the modification being finalized, should I just wait until mid-March, or until I receive confirmation that the modication has been finalized before I officially file for BK?

The modification did not help me that much, my house note went from $1,450 to $1,291. Yes, that is a help, but not like some of the modifications I've heard about. Also, I was laid off on Jan. 28th so I am now on unemployment. My unemployment covers my house note and my car payment with a little extra left over. Currently I can live on that with the subsidy of my tax return and severance pay.

Any input on this would be appreciated.

Thanks much!

p.s. I'm in Texas

[justbroke]

If you have a real modification that's going to be recorded and it's not under HAMP, then you really need to get the modification done and recorded before filing Bankruptcy stays all proceedings and changes... including recording liens or any thing else that encumbers property! That's why BK messes up modifications in progress! So best is to get the mod done and recorded first!

I was in the middle of a modification, it was approved and just as I was about to get the paperwork, I filed BK. I did so because of an impending sale date on my investment property that I wanted to save. Bad move on my part because I called them the day after I filed to learn of my mod and voila... "oh, I see you just filed bankruptcy... sorry, the modification is rescinded due to the bankruptcy". Just like that, my modification was gone.

(Note: for HAMP modifications, the lender is allowed to continue the modification process through a bankruptcy. However this is up to the lender.)

[LizardTail]

Ok, then I will hold off having the BK papers filed. I had actually talked to someone at the mortgage company yesterday and she said I should be receving my final documentation in 2-3 weeks. When this FED EX came today, I thought that's what it was. I will get my last two bank statements to them tomorrow. Their letter clearly states that my trial period expires on March 1, 2010 and that they urge me to return the documents by Feb. 27.

Thanks for that quick reply. I think it will be a done deal.

[fortknox]

Can I add onto this question? I asked something similar several days ago but didn't really get an answer....

I have a HAMP modification-the final papers have all been signed-and it will be effective as of April 1st. Should I hold off on filing until that time?

Also, maybe a stupid question but what do you mean having the modification recorded? Who does that-me or mortgage company?

[LizardTail]

I don't know what HAMP is, but I am under the assumption that the mortgage company will have the documents recorded with the county clerk's office. This is a best guess, I hope others will chime in.

[justbroke]

HAMP is part of the whole U.S. Government intervention into making homes affordable. HAMP (Home Affordable Modification Program) provides some incentives for loan companies to modify loans -- and make the modifications permanent.

Because Bankruptcy stops (freezes) a bunch of things, it's best to get any loan modification recorded before you file. Otherwise, it could sit in limbo until your case closes.

Many loan modifications, these days, are being done under this government-sponsored HAMP program. When your mortgage note is modified, that's usually recorded with your county recorder, just like your original mortgage (promissory) note. This is done by your lender. It is the note that is the "debt" they need to collect and the terms.

[espo1357]

You need to get authorization from you attorney, indicating that your servicer can continue with a loan modification.

That is what I needed to do, and it worked out. Still waiting for an answer on the HAMP.

At this point, I could care less, I think?

good luck.