Loan Mod AFTER discharge and surrender?

[BK Overwhelmed]

Hello!

We had a ch 7 (over median) successfully discharged Sept. 2008. We chose to include our home in the BK since we knew we were upside down and in an interest only arm.

Well...it took Countrywide this long to begin forclosing and we just now have an auction date of May 20th, 2009. With the "new" program we thought we would try a last shot at getting back into the home. If we could get a FIXED rate that would make it worth our while to stay (we moved out 6 months ago per our attorney who thought they would take the home quick). We also have a heloc with Compass (over $115k) and totally upside down. Compass would get nothing in a forclosure sale. Not sure how to deal with them since we already did ch 7. Could we do a ch 13 ALSO, JUST to strip the lien with Compass??? Should we try to "settle" with them ourselves or hire someone to negotiate for us?

Of course I don't need to deal with the second if I can't get the 1st with Countrywide to negotiate, but I have a hunch they will.

I just feel like we are in a unique situation since our home was surrendered in BK and discharged but now we are trying to get back in. We haven't made payments since May '08. Any thoughts?

[HHM]

Candidly, not likely. The "new" programs are not that different than the old programs. (what is different is there are some incentives from the government to try to motivate banks to modify, but the decision to modify is still in the banks hands).

Even if you got a fixed rate, would your monthly payment still be 31% or less of your gross monthly income. The dirty secret about interest only is that when your payment switches to Principal & Interest, the payment usually goes up or stays about the same. So, could you really "afford" the P&I on a fixed rate in the amount of your first mortgage.

The second mortgage is still problematic, so your plan is about all you can do, at some point, settle out with the second.

Although the publications state that a bankruptcy does not automatically disqualify you from getting a modification, I think you should be prepared that your chances of a modification are slim at best.

[AfraidOfBK]

May I ask, why did your attorney have you move out? Were you missing payments on the home b4 you filed BK? I am late 1 month on mortgage and going to file in June or July....but I would like to stay in the house as long as I can rent free (since I might be moving out of state and do not want to start a new lease agreement here.)

Even though you surrendered the house, was the foreclosure process not complete, and so you technically could have stayed????

I guess Im asking, when did your process begin (when did you decide you no longer wanted the house and how did you handle that with regards to your BK planning?)

THANKS!

[BK Overwhelmed]

Let me think..we planned to file in June '08 (and had been planning to file BK for almost a year before) but didn't decide to surrender the house until last minute. By the time we filed, we were only 30 days late on mortgage. The attorney advised we be out within 2 months of filing date because we would likely be kicked out by then. Plus it was helpful to have a new lease agreement in place when we filed. So we did that!

Yes...technically we could have stayed rent free for a year! And it burns me up...but what can we do? We would never had guessed it would take them year to forclose. To boot we just had to pay the HOA $600 in arrears assesments and attorneys fees since the deed is STILL in our name even thought our financial obligation to the loan was discharged Sept. 08.

Some people get forclosed on in a couple months...others...a year or more.

Hope that answered your question.

[plantlvr]

I quit paying my mortgage in Sept. 08, went through Chapter 7 bankruptcy, discaharged 2/23/09, and STILL no NOD! I've been living here without making a payment for almost 8 months now. Still get my bill from countrywide, but that's it. So until I HAVE to move out I'm staying put!

[hereforinfo]

I am pretty sure that one of the requirements for a loan mod under the new program is that you currently live in the house. You may be out of luck since the house is vacant. However, it doesn't hurt to try and maybe Countrywide won't even ask. Expect the worst, but hope for the best. Good luck!

[cheekybegr]

We are in the same position but further down the road, we havent paid mortgage since last Oct, we filed Ch7 in March last year and were discharged in Jul we told the judge we wanted to keep our home and signed the reaffimation agreement. 1st loan is primary and 2nd is a HELOC we used to buy the house and navigate around PMI. We fell behind in Nov and worked thru HOPE NOW they qualified us for a mod and contacted our mortgage company who didnt move until last month. We learned that they did not file the reaffirmation and because of this we dont qualify for the mod our home note is held by Fannie Mae who told us they cant help either its up to GMAC. While we were working with loss mitigation they served us foreclosure paperwork (during my daughters birthday party on a Sunday - pissed). We recently filed an appeal to by some time the case management hearing is set for August. We QUALIFY for the programs but GMAC will not let us in to one, we are miffed by the approach they have taken, our BK lawyer doesnt understand this either but in 3 months we will be evicted if we chooses not to reinstate

[LoanExpert]

I think you would qualify for a loan modification as long as you can demonstrate your ability to repay the loan. Your lender does not want to own your house! In terms of 2nd lien holders, we have successfully received settlement offers at 10% of the balance owed. We have also reduced the interest rate on 2nd lien holders to as low as 3%. I'm not sure what state the OP is in, but the 2nd lien holder does have several ways to get some money from a foreclosure, even on an 'underwater' property. If you truly want to save your home you should look for a loan modification service that is reputable or an attorney. You will of course pay a fee which is obviously worth it if you get to stay in your home!

[cheekybegr]

We recently hired an attorney, to help us through the legalities GMAC Mortgage still wont modify the loan as we approach the case management hearing, I wrote to the VP of the company which seems to have worsened the situation. The loss mitigation rep had told us hundreds of folks are in the same situation, it appears that GMAC has a policy not to file reaffirmations I have no idea why. They have hundreds of customers who qualify for help but they refuse to give them access to the new government programs.

The lawyer is having no joy either he has advised us that we might have to find a way to come up with the full amount to stay in our home

We basically have to reinstate or be evicted, with our credit in pieces I don't know where we go. We would be happy if they just took what we owe and stick it on the back of the loan, obviously its not what we want but they wont even do that. They are been real asses about this, I am writing to our states attorney but not sure if that will help. Something stinks about this whole process.

[isla1]

I reaffimed my 2 mortgage loans under my atty's advice. My goal was to keep my home by modifying the loan to something sensible. I have a 100% interest only ARM that will adjust next May with Aurora Loan , and a second mortgage with CitiMortgage. But I am loosing faith that Aurora will modify because their qualifications are so strict. I had one person tell me that if I include my husband's income we'll be too high, and that my income needs to be"bumped up a little" if possible. The mortgage is in my name only. So even if Aurora does modify my loan, what about CitiMortgage, my 2nd loan. I've reaffimed it, so I guess I'll owe them? And if Aurora won't modify I'm stuck with a $200,000.00 loan! Should I just surrender the property. I haven't made a payment since March 2009. If I surrender will they still maybe want to negotiate? If they don't at least I'll be out from under the weight of that debt, correct? I understand that since my BK hasn't been discharged yet, I can change my mind and instead of reaffiming, I can surrender my property. Any thoughts on this matter would be appreciated.

[SMinGA]

Contact your atty ASAP about canceling the reaffirmations! If the reaffirmations stay in place, you're on the hook for both mortgages!

Let the debt be discharged, and then see what you can do but be prepared to walk away if you need to. Voiding the reaffirmations would be my first step if I were you.

I understand that since my BK hasn't been discharged yet, I can change my mind and instead of reaffiming, I can surrender my property. Any thoughts on this matter would be appreciated.

[NoMoreCards]

I would run, not walk to cancel those reaffirmations!! Otherwise you WILL be on the hook for both mortgages.

[isla1]

Thanks a Million! I called my atty and he said I hadn't signed reaffirmation papers and nothing had been documented about reaffirmation on Pacer under Docket, and so it's all good and to just stay in the house until I'm notifyed by the mortgage co that they are going to forclose. I hate to loose my home but I don't want to be in debt for it, when it has lost so much value in the real estate market. Does this sound right? Because I didn't know anything about signing reaffirmation papers. Hopefully my atty knows what he's doing! Any other advice is welcomed!