Do mortgage companies modify if current?

[basketsbears]

Hi,

We are planning on filing chapter 7 next month. I have read a lot about people who are behind and can modify their mortgage when filing, but what if you are current? Will a bank lower interest? We are probably $10,000 upside down.

Just curious.

Thanks!

[tobee43]

i know when we attempted to modify we were NOT behind, but in trouble when we contacted Chase for a loan mod

what we were told or MADE to do to qualify was we had to be at least 3 months behind on our mortgage or we would not qualify. of course, now they are saying that was absolutely fraud on the part of the banks. first you are on time, no you can't get a mod, then you are late and after 18 months of paperwork and believe me, i brought my paperwork in my hand, with a list and a receipt that had to be signed by the bank manager that they got the items...within 3 days they claimed they never got them and over and over and over and over...it was just a big scam.

we were still in the middle of our modification when Chase served us with a summons of foreclosure...so we left as opposed to having the 30 days to answer we decided, keep the house (after over 30 years) we have had enough.

now, over 4 years later, they still haven't foreclosed, i even checked that county's sheriff's sale listings this morning and they up to day to july of 2012 and our house is still not listed to go into foreclosure. i got a call about a month ago from Chase asking what are intention are with the house LOL!!! we moved out of state over 4 years ago. i guess they want us to do a loan mod now!

[Pandora]

It can vary by lender, but yes, they can modify if current at their discretion - however... once you enter into trial payments, you are then considered behind in payments.

Odd way of doing things, but thats how it works unfortunately.

[Drazil65]

We also were told that we needed to be at least 90 days behind in order to qualify for a mod (BOA), we tried to get help well before we were in trouble but they would not even talk to us about it. Now they are starting the foreclosure process, not exactly the smartest move on their part right? Good Luck with getting help!

[HHM]

Probably not.

Although there is no legal requirement that you be behind on payments, the banks are generally not devoting resources to helping those that are current on their payments. If you are current, why would you need help? Is their position.

You can try, but I wouldn't count on it.

[Tater]

We tried for a modification after I lost my job last year. We remained current on our payment and were turned down because we were current. We were told we would have to be behind a couple of months behind which scared us so we decided not to try that route. Now that we are going to file for bankruptcy, we are not reaffirming our mortgage. If we can qualify for Chapter 7 we need the mortgage payment on the means test. The lawyer we chose is adamant about not reaffirming the mortgage. She said since we are upside down on our mortgage since property values declined that we don't want our house to own us if something happens after we are discharged.

To be quite honest, if we can qualify for Chapter 7, we might just walk away from the house once we are discharged. It's something that we have been discussing. If we choose to stay after discharge, we will be protected in the future.

[btbeme]

Hi,

We are planning on filing chapter 7 next month. I have read a lot about people who are behind and can modify their mortgage when filing, but what if you are current? Will a bank lower interest? We are probably $10,000 upside down.

Just curious.

Thanks!

Almost all of the programs for modification are for those who are in danger of default. While a BK discharge will show that you had debts that were killing you, it also shows the bank that you now have less debt and are less likely to default. Believe it or not. So, most banks measure your need for a mod by seeing how far behind you are on payments and comparing it to your income (and debts) to see if they could keep you from defaulting with a lower payment.

That last word is important - "payment" - because it is very rare that a modification grants you a lower "debt amount" or mortgage. In fact, they way that most modifications are done, the timeline for payment stretches out and late fees and missed payments are often added back in, resulting in - maybe - a lower PAYMENT but a larger DEBT over the long term. And don't expect a bank to anything about how much principal you owe - you will likely still owe every cent of it and still be upside down on the house.

There are few exceptions, but they do exist.

[keepsmiling]

We tried for a modification after I lost my job last year. We remained current on our payment and were turned down because we were current. We were told we would have to be behind a couple of months behind which scared us so we decided not to try that route. Now that we are going to file for bankruptcy, we are not reaffirming our mortgage. If we can qualify for Chapter 7 we need the mortgage payment on the means test. The lawyer we chose is adamant about not reaffirming the mortgage. She said since we are upside down on our mortgage since property values declined that we don't want our house to own us if something happens after we are discharged.

To be quite honest, if we can qualify for Chapter 7, we might just walk away from the house once we are discharged. It's something that we have been discussing. If we choose to stay after discharge, we will be protected in the future.

"home to own US"... nice turn of phrase

[basketsbears]

Thanks for all the advice. We had tried modification with our rental with BOA, which was a joke dealing with BOA, the major reason we will be filing.

We are not going to reaffirm anything. We will just keep paying and see what happens. I have thought about walking away at some point too, but it just seems like it would drag everything out so much longer.

Thanks!

Lynn

[tobee43]

well, looking back at some of my own personal decisions, if i could have kept the income properties i most certainly would have, that money would have meant the WORLD to us. as well as since no one is getting mortgages rentals are doing great, even though home values are so down.

try and stick it out if you can...10 years down this bumpy road, it will be very smooth if you can grin and bare it.

[Tater]

well, looking back at some of my own personal decisions, if i could have kept the income properties i most certainly would have, that money would have meant the WORLD to us. as well as since no one is getting mortgages rentals are doing great, even though home values are so down.

try and stick it out if you can...10 years down this bumpy road, it will be very smooth if you can grin and bare it.

tobee,

You make a good point about sticking it out. I honestly don't see us walking away from our home anytime soon. We made a lot of repairs last year, including a new furnace. I guess it's the reassurance knowing that we can in the future if something happens. Our second mortgage will be paid off in less than three years along with one of our vehicles. And without all the unsecured debt, we can make the payment comfortably on one income.

[tobee43]

it seems to me that you are thinking this situation through like a game of chess. which is exactly, if one can do, should.

we have few regrets, yet, of course some. it sounds like your plan is solid and with foundation. we walked away from our home after over 30 years, however, for us, it was the right choice. and that's great that you can see the light at the end of the tunnel!