rental property mortgages

[rw8484]

I have 5 rental properties and all 5 have a mortgage. 2 are with BOA and they are HELOCs in first lien position. I was told by their BK department that they are NOT allowed to charge me late fees. She said that one of my accounts was not coded properly and had some late fees that the bank will be waiving.

The other three mortgages are 30 year fixed. 2 are with GMAC and 1 with Wells Fargo. When I pay any of these 3 after the 16th of the month on-line, they demand and I give them a late fee.

Filed CH7 June of 2010, discharged Nov of 2010. Did not re-affirm any of these mortgages. Do any of these lenders have the right to charge late fees? I'll let the group answer and then I may have more questions because I have been learning a lot from this forum. Things that the BK atty was too busy to discuss, I guess.

[BobMango]

I'll be interested in the responses to this question as well. I have a rental property that has a HELOC in the first position that I did not reaffirm. My thinking all along has been that since I'm doing a ride through on this the terms of the contract basically stay in force as long as I'm paying. I take that to mean that if I miss the payment deadline they can assess a late fee.

Having said that, they did establish an escrow account for $18K in back taxes, but I finished paying that last month. Since this type of loan typically does not carry an escrow account they were all kinds of messed up about it. My statements have shown an overdue balance for the past two years, but never has a late fee been assessed. I've even paid the entire amount they say is due a couple of times with a letter stating how to apply the payment and they can't get it cleared. When I call to find out why they didn't apply the payment as specified they indicated that there really isn't an overdue amount.

At any rate I don't worry about it anymore since they are not charging a late fee and they have not reported on it since my discharge in Feb '10.

[justbroke]

Filed CH7 June of 2010, discharged Nov of 2010. Did not re-affirm any of these mortgages. Do any of these lenders have the right to charge late fees?

If you still have possession of, and want to keep these properties, then you must pay the late fees. Remember, that liens (and the terms in the promissory note and mortgage/deed of trust) pass through bankruptcy unaffected. You discharged your personal liability (in personam) responsibility to pay the note. However, the mortgage and terms in the note are otherwise enforceable, including acceleration and foreclosure.

So, if the terms of the note contains provisions -- which it should -- regarding late fees, then it is enforceable. Otherwise, it is not. It should be business as usual. If they charged them pre-discharge, they can charge them post-discharge. However they can't attempt to actually "collect" it. They are probably sending "informational statements" -- if they're even doing that -- with any "allowed" late fees included.

[rw8484]

Thanks fo the reply. So then I wonder why BOA told me that they are not permitted to charge me late fees? She actually said, "I see that we charged late fees to you, we are not allowed to do so as you had a bankruptcy, we will have to waive these." Also, will missing payments on any of these mortgages hit my credit at all? I cannot see how it would since I am no longer personally obligated to pay on them.

[justbroke]

What I'm saying is this. If it's in your actual promissory note, and allowed under your State law, then they can charge late fees. If the charge is not enumerated in the promissory note, or it is prohibited under your State law, then they can not charge late fees. It is that simple.

Missing payments shouldn't affect you since it does not get reported. I have had one property surrendered in bankruptcy that was foreclosed upon. There was no mention of foreclosure and no public record for the judgment either. The general consensus is that there shouldn't be any record if it was discharged in bankruptcy.

[rw8484]

Missing payments shouldn't affect you since it does not get reported. I have had one property surrendered in bankruptcy that was foreclosed upon. There was no mention of foreclosure and no public record for the judgment either. The general consensus is that there shouldn't be any record if it was discharged in bankruptcy.

Another question on missing payments. I'm pretty sure that I did not surrender the property in bankruptcy. I chose the option of keeping the property. So, now, if I miss a payment, will this hit my credit? Thank you.

[BobMango]

Another question on missing payments. I'm pretty sure that I did not surrender the property in bankruptcy. I chose the option of keeping the property. So, now, if I miss a payment, will this hit my credit? Thank you.

The key is not what you indicated on your filing paperwork, but whether or not a reaffirmation agreement was completed. Just indicating that you want to retain the property does not constitute a reaffirmation. It has to be executed by both parties and submitted to the court before your discharge.

[rw8484]

The key is not what you indicated on your filing paperwork, but whether or not a reaffirmation agreement was completed. Just indicating that you want to retain the property does not constitute a reaffirmation. It has to be executed by both parties and submitted to the court before your discharge.

Ok, I only singed a reaffirmation on my auto loan. So, it seems to me that I will not get dinged on my credit report for going 30 days down on a mortgage. Thank you!

[rw8484]

Ok, I just pulled a free copy of my credit report. How can I tell what mortgages are "reporting"? It appears as though my mortgages ARE reporting. I am not sure how to tell. Does anybody know?

[justbroke]

Ok, I just pulled a free copy of my credit report. How can I tell what mortgages are "reporting"? It appears as though my mortgages ARE reporting. I am not sure how to tell. Does anybody know?

They may be "reporting" but have stopped providing monthly "updates". You can tell by the last month that there is a status.

[rw8484]

They may be "reporting" but have stopped providing monthly "updates". You can tell by the last month that there is a status.

Well, here is what is showing on my free credit report:

4 out of the 5 mortgages for my rental properties state as follows:

1.) last reported 11/2011
2.) Status: Discharged in Chapter 7 Bankruptcy, never late
3.) Debt included in bankruptcy Nov. 16th 2010 (my discharge date)

A detailed balance/payment history is shown from Dec 2009 up until 11/2011

The 5th rental property mortgage shows as follows:

1.) last reported 12/2010
2.) Status: Discharged in Chapter 7 Bankruptcy, never late
3.) Debt included in bankruptcy Nov. 16th 2010 (my discharge date)

A detailed balance/payment history is shown from Dec 2009 up until Dec 2010

My primary 1st mortgage is not even shown as included in the BK although my 2nd mortgage on my primary is showing:

1.) last reported 11/2011
2.) Status: Discharged in Chapter 7 Bankruptcy, never late
3.) Debt included in bankruptcy Nov. 16th 2010 (my discharge date)

A detailed balance/payment history is shown from Dec 2009 up until 11/2011. However on this one, the balance shows $0.00 after November 2010 for every month thereafter.

Is there anything wrong here? Thanks everyone very much!

[BobMango]

Well, here is what is showing on my free credit report:

4 out of the 5 mortgages for my rental properties state as follows:

1.) last reported 11/2011
2.) Status: Discharged in Chapter 7 Bankruptcy, never late
3.) Debt included in bankruptcy Nov. 16th 2010 (my discharge date)

A detailed balance/payment history is shown from Dec 2009 up until 11/2011

The 5th rental property mortgage shows as follows:

1.) last reported 12/2010
2.) Status: Discharged in Chapter 7 Bankruptcy, never late
3.) Debt included in bankruptcy Nov. 16th 2010 (my discharge date)

A detailed balance/payment history is shown from Dec 2009 up until Dec 2010

My primary 1st mortgage is not even shown as included in the BK although my 2nd mortgage on my primary is showing:

1.) last reported 11/2011
2.) Status: Discharged in Chapter 7 Bankruptcy, never late
3.) Debt included in bankruptcy Nov. 16th 2010 (my discharge date)

A detailed balance/payment history is shown from Dec 2009 up until 11/2011. However on this one, the balance shows $0.00 after November 2010 for every month thereafter.

Is there anything wrong here? Thanks everyone very much!

All of your mortgages should be showing as IIB with zero balance due, unless you reaffirmed. Since you previously indicated you had not I would dispute those that are still showing a balance or do not indicate IIB. One year post discharge should be plenty of time to get it all sorted out so you may need to help them out.

If your mortgage holders want to report your on time payments I would not consider that a problem. They absolutely can not report negative information on your discharged mortgages beyond your discharge date. I would probably not mess with the ones that are reporting positively, but just keep an eye on them and if any do show negative information beyond Nov 2010 then dispute them.