modification, dont know what to do...

[mickeysfriend]

We were discharged recently from our Chapter 7 bankruptcy. We've been in review with Wells Fargo for a modification for a while. The other day I called and was informed that they are offering us a 6 month trial period where our mortgage is cut in half. They said at the end of the 6 months, they would review us again and decide if they are willing to give us a permanent modification. They said we need to reduce our debts or increase our income. We have no debt. So, that leaves an increase in our income. My husband is in the lumber market and is paid on commission only. I have a small business that is finally growing! I 'think' we can show an increase in income in 6 months. But, what if we cant ? our income over the lasts 6 months has already increased from the time we actually filed the BK, but again, my DH is commission only in the lumber industry which is VERY dependant on the economy and housing.
Right now our house was included in our BK and has a sell date of December 3. What if they don't give us a permanent modification in 6 months and they foreclose at that time? Is it better to walk away now with everything wrapped up in the BK, or does it matter if in 6 months they foreclose? What's better for rebuilding credit?

[destitute]

since the house was included in bankruptcy the mod shouldn't make you liable for payments again. If you want to keep the house then by all means take advantage of the lowered payment. If they don't adjust you in 6 months you should still be able to walk away. Just make sure you're not signing up for a "new" mortgage that you would be liable for.

[NewLifeAhead]

I'm entering the same situation you are in right now. I have Wells Fargo, will be discharged (Ch 7) Oct 13th and foreclosure process will start anytime after 09/23.

From reading previous posts, I do believe the original mortgage technically doesn't exist anymore (after a chp 7) as you are no longer liable for that mortgage. Yes, one could keep the payments current (ride-through) and the bank wouldn't foreclose but they wouldn't report to credit agencies that you are paying.

So I would be very surprised if there isn't language in the trial mod paperwork that you would be 'reaffirming' the mortgage if you accept the modification.

Be careful and read those documents thoroughly. Sounds like after those 6 months, the payments will/could rise significantly again.

If the paperwork says nothing about reaffirming during the trial period, then it's possible you can still walk after 6 months if they deny a permanent mod or the payment is too high.

Read it and then show it to your lawyer to be sure.

Good luck with this and let us know how you make out.

[mickeysfriend]

Thank you!
Wells Fargo said they mailed the paper work last week, but we have not received it yet. Our attorney SUCKS A$$!!!!!!!! BIG TIME! I can NEVER talk to anyone but the receptionist. She wants details and then asks the attorney or legal assistant and then tried to relay the legal advise....she sucks at it. I'm SO done with them, so I'm on my own to figure this out!