When and what to say to mortgage co

[Jf24]

Just filed ch7 on 4/27. Behind on 1st and 2nd and want to stay in the house.
Was wondering if now is a good time to call the bank (credit union) to find out my options on getting caught up on the mortgage or wait. Also wondering what I say or ask. I have about 2 months I can pay on the first now.

[sh9730]

JF,

My first suggestion is until you are 100% sure you are going to work out something so you can stay in the house - DO NOT MAKE ANY PAYMENTS! You may need that money in case you cant work it out completely and they foreclose.

Next, I would try and see if they can do a loan modification for you although Im not sure how credit unions are to deal with in this regard, especially when a BK is involved. I ve heard CUs are not fun when it comes to BK (I didnt have any with mine). But, I (and others) were able to get a new loan MODIFICATION (not a reaffirmed loan) after BK was completed, and they just tacked on all the late interest for the payments I had not made into the modified loan. I also got a lower rate and all late/legal fees were dropped.

But, even though they will say "pay what you can - its better than nothing" - that IS NOT TRUE in this case - nothing may be MUCH better for you in the long run if they take your money and they still foreclose!

[Jf24]

I had a modification on the 1st about 3 years ago. Went from 4.75 to 3.5 interest and saved a whopping $125. A month. Didn't help back then much. Is it possible to do a mod again if one was done already?

[sh9730]

Well, again, I dont know how CU are to deal with, but yes, you can apply again for HAMP etc. It looks like you got a pretty good mod already.

But my main point is, until you are either ready to be COMPLETELY current, or get some new arrangements IN WRITING, dont make any payments...you could pay that money (but still be behind a little or whatever) and find them have them filing paperwork to lift the auto stay and start FC proceedings anyway. Then you ll never see that money again and might not have enough for a deposit etc on a rental if needed.

Also, of course DONT REAFFIRM (see the thread above).

[btbeme]

Just filed ch7 on 4/27. Behind on 1st and 2nd and want to stay in the house.
Was wondering if now is a good time to call the bank (credit union) to find out my options on getting caught up on the mortgage or wait. Also wondering what I say or ask. I have about 2 months I can pay on the first now.

Call after you have obtained a copy of your discharge order. It is pretty much impossible for them to actually do anything until discharge. And a large payment (where was that cash when you filed? The Trustee might want to know) would attract unwanted attention.

Sit tight. After discharge you will have the best possible case to make. And even then I'd seriously consider NOT paying until you received their best offer. You can then use the saved-up cash for negotiating a better deal. Or, perhaps, since NY is a judicial state with about a two year backlog of foreclosures to work through...

[Pandora]

I had a modification on the 1st about 3 years ago. Went from 4.75 to 3.5 interest and saved a whopping $125. A month. Didn't help back then much. Is it possible to do a mod again if one was done already?

If it didnt help and you're currently set at 3.5% from the previous mod -you arent going to go any lower than that with another mod. Current interest rate is higher than that now and according to the news this morning, Congress is considering (heavily I might add) doubling the interest rate by July.

Any reason why you cant just let the house go and rent another place that is more inline with your wallet?

As to paying to catch up - dont throw good money after bad.... let the bank have the house.

[Jf24]

Sit tight. After discharge you will have the best possible case to make. And even then I'd seriously consider NOT paying until you received their best offer. You can then use the saved-up cash for negotiating a better deal. Or, perhaps, since NY is a judicial state with about a two year backlog of foreclosures to work through...

So I should wait to call to talk about options. If things go ok 341 is 6/6 so a discharge will be around early Aug. That will make it 8 months late on 1st and 9 months on 2nd. Is there a point of no return?

.

Any reason why you cant just let the house go and rent another place that is more inline with your wallet?

As to paying to catch up - dont throw good money after bad.... let the bank have the house.

Rent is very high here. Just about what the mortgage is. I though a mod will enable you to take care of the areas, like tack it on the end.

[Pandora]

Rent is very high here. Just about what the mortgage is. I though a mod will enable you to take care of the areas, like tack it on the end.

Depends on the mod offer and what your LTV ratio is; bank is going to look out for themselves before they look out for you, even if its more cost effective for you if they modify.

Did your last mod lock the rate at 3.5%? It's important for you to know the in's / out's of that mod and how another one would work. Again, I seriously doubt you will get anything lower than 3.5% if thats what you're currently at now, so you need to look at other options. If they offered you another mod and tacked arrears onto the backside of the loan, you could end up with a higher payment than you currently have due to fees should they opt to add them. Then you get into that whole balloon payment thing....

Are both your 1st & 2nd with the same lender / credit union? If so, then chances of foreclosure are higher in that type of instance.

[SMinGA2]

What does your attorney say?

Contacting the CU now is probably pointless, due to the automatic stay. They're not supposed to deal with you as it might be viewed as an attempt to collect.

Something you need to figure out: can you afford to keep the house with the 1st & 2nd payments as they are now? I believe you said they're with the same CU, so you don't really have the 'out' that some people do on upside down homes, in that they can keep paying the 1st and ignore the 2nd in the hopes to eventually settle.

[Jf24]

Did your last mod lock the rate at 3.5%?
Are both your 1st & 2nd with the same lender / credit union? If so, then chances of foreclosure are higher in that type of instance.

Yes, locked in at 3.5 Yes same lender and is Navy Federal and I read they are hard to deal with.

What does your attorney say?

Contacting the CU now is probably pointless, due to the automatic stay. They're not supposed to deal with you as it might be viewed as an attempt to collect.

Something you need to figure out: can you afford to keep the house with the 1st & 2nd payments as they are now? I believe you said they're with the same CU, so you don't really have the 'out' that some people do on upside down homes, in that they can keep paying the 1st and ignore the 2nd in the hopes to eventually settle.

Haven't talked to him yet. I can afford this house now that there are no credit cards to pay. I have adjusted spending habits to avoid getting into that mess again. I really need to stay in this house. It is underwater now but even 10 years from now things will be different.