Loan Modification Interruption

[welly1970]

I need your honest advice here is my situation.

I have got approved by my lender (ASC) for a loan modification and i agreed to it. We sent the documents back with a contribution requested by the bank to cover all fess the amount was almost $4000. they got the documents and the money ,2 weeks after we filed chap.7 but we intending to keep the house,i sent August payment to the mortgage as per the agreement i signed and sent to them so,now they got the $400 plus 1 month payment.
I have contacted them today to see why i am no getting anything from them also because i want to pay for Sept. and the surprise was they said the modification was null and void since i filed for BK and asked me to apply all over again or they will set a sell date for the house.
Now they got almost $6000 from me for a loan modification that they agreed to and they accepted the money which they said they will never give back.

I do not know what to do should i just keep paying what we agreed on even though they might refuse to take the payment or what else i should do please help

[justbroke]

Did you file your case with an attorney? If so, I highly highly recommend you refer all of this to them.

If you did not file your case with an attorney, keep reading. You sent money post-petition (after filing) to a secured creditor. They get to keep that money. Filing Bankruptcy always affects an "in-progress" loan modification.

You need to decide if the house is even worth keeping from a business decision. If that house is underwater by more than 10%, you need to let it go. I'm real sorry to hear that you sent $4K into the lender post-petition and didn't know the offer was rescinded. The course of action is to consider where you want to go with this. If you really wanted to save your home, perhaps you should have been in a Chapter 13?

When did you file your Chapter 7? Are you now current on your mortgage payment? If not, it would not surprise me if they haven't already, or are about to, file a Motion for Relief From the Automatic Stay (MFRS). This is where they ask a Judge to grant them leave to pursue foreclosure.

I really hope you do have an attorney, because there are important decisions to make and some important things that need to be done.

[welly1970]

the loan was modified on 6/6 ,docs was sent back and received on 6/17 .BK was filed on 6/27 so they got the money before they got the BK notice.i asked an attorney and he advised me to pay August payment and to follow through with the agreement to have a case if we go in front of the foreclosure judge ,now after i found out that the agreement is null and void what should i do,i have a BK attorney and he does not know .we want to keep the house.should we continue to make payments.
PS. they got the relief of stay already.

[justbroke]

the loan was modified on 6/6 ,docs was sent back and received on 6/17 .BK was filed on 6/27 so they got the money before they got the BK notice.i asked an attorney and he advised me to pay August payment and to follow through with the agreement to have a case if we go in front of the foreclosure judge ,now after i found out that the agreement is null and void what should i do,i have a BK attorney and he does not know .we want to keep the house.should we continue to make payments.

Wanting to keep the house, and if it's worth keeping are two different things. I was hoping to get more information about whether you have real equity or whether you are underwater.

PS. they got the relief of stay already.

If they have the relief, they are pursuing foreclosure! Just what is your attorney's Strategy???

Of course he can challenge the foreclosure, but who knows if that will work. Plus, he would need to appear in your local courts... did he say he'll do that? Sounds like he's leaving you high and dry.

You may need to convert to a Chapter 13. This is why you really need to ask your attorney point-blank, what's his strategy for this since he gave you.. .questionable advice... since you are now looking at foreclosure anyhow and have potentially thrown $6K away.

[welly1970]

my house is underwater as every one else but we want it to take the chance and we made the decision of keeping the house after extensive thinking.

my BK attorney said he wants to charge us $2500 as a start to take care of the foreclosure issue ,i consulted another attorney and he said since the loan modification was approved prior to BK filing and since they have accepted my contribution that was agreed on the loan modification documents that makes any judge enforce this agreement but again he said he will defend the case and i have to come up with the fees.
now i am really confused and wanted to know if any body heard of something like that and how to go about the case.
if they accepted the payment and got the documents before BK filing why they refused to go a head and modify the loan.

[justbroke]

The reason why I'm hesitant for you to proceed on the case by yourself, is that in District court, where the foreclosure action is, you could get eaten alive by the lender's attorney, who does foreclosures all day.

I think you have a case, but I also think you need competent professional legal services rendered by an attorney who specializes in this area.

Worse case, you convert to Chapter 13...

[welly1970]

why you think 13 is better than 7 ,i really do not know so much about that ,and can i keep the house then ,i already went to the 341 meeting does that make any difference.

thank you for your help

[welly1970]

also could you tell me what kind of attorney should i look for to help me with this issue?

[justbroke]

why you think 13 is better than 7 ,i really do not know so much about that ,and can i keep the house then ,i already went to the 341 meeting does that make any difference.

If you really want to save your house, a Chapter 7 can't do that. The reason you have a Motion for Relief from the Automatic Stay (MFRS) granted, is because the Bankruptcy court believes that the creditor is entitled to exercise their non-bankruptcy rights to take the foreclose upon the collateral.

I hope you didn't misunderstand me. I wasn't saying Chapter 13 was better. I'm saying that if you can't resolve the MFRS, and the foreclosure issue, due to the botched modification, then your only option to save the property would be a Chapter 13.

[welly1970]

Just an update on the issue.
after staying on the phone with them for hours the last 2 days i got the final answer,they said the investor refused to sign the loan modification and when i confronted them with the fact that the loan modification was already approved and the documents that they sent me stated that the loan was approved they said that its like a contract 2 people have to sing it which i did but the investor did not due to the fact i filed for bankruptcy.
Now should i take them to court for illegal behavior since they aprroved me and got my money then they said we can not approve you or what?

[justbroke]

Now should i take them to court for illegal behavior since they aprroved me and got my money then they said we can not approve you or what?

This might forestall foreclosure, but if that modification requires another set of signatures... you may still end up in foreclosure at the end of this. You don't even have to take them to court. They are already suing your for foreclosure. You would counter-sue on that claim that the modification was executed. You would need an attorney. This will cost money. I think, in the end, you may not have had a valid contract as they never recorded your new Mortgage/Note. You'd have to rest on the modification by itself.

If you're dead-set on keeping the home, your only recourse may be a Chapter 13.

[welly1970]

This might forestall foreclosure, but if that modification requires another set of signatures... you may still end up in foreclosure at the end of this. You don't even have to take them to court. They are already suing your for foreclosure. You would counter-sue on that claim that the modification was executed. You would need an attorney. This will cost money. I think, in the end, you may not have had a valid contract as they never recorded your new Mortgage/Note. You'd have to rest on the modification by itself.

If you're dead-set on keeping the home, your only recourse may be a Chapter 13.

what do you mean by another signature ,here is a similar documents of what they sent me please go over it to see your self it is a final approval no other signature required beside ours

http://loanmodificationattorney.com/sample-loan-modifications/pdfs/ASC1.pdf

[justbroke]

what do you mean by another signature ,here is a similar documents of what they sent me please go over it to see your self it is a final approval no other signature required beside ours

Where it reads "America's Servicing Company" on the last page... do you have a copy with a SIGNATURE on there? Until there's a signature there, there is no agreement, because it reads "the parties hereto".

If you have a copy with original signature and there is a signature there on that ACS line... you may have a case. I've never read any agreement (except for credit card agreements, but they are different) where there wasn't a countersignature by the executing party.

Remember, approval of the modification is just the formal acceptance that they will do one. However, the signatures need to be on the actual "agreement".

[NewLifeAhead]

Justbroke... I may be wrong here, but: Even if the mod was signed by both parties, isn't there a 3 month trial period where you must make timely payments before it becomes permanent? And then during this trial period, if you file BK then the loan mod can be voided?

[welly1970]

there is nothing on the agreement stated that ,beside i already made August payment and they said they will not take any more payment from me.

Also the document did not have anyones signature and it was only required for me to sign.plus they got the money that they asked me for and was accepted and applied as a contribution to facilitate this agreement