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Loan mod after CH7 discharge! YEA!

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    Loan mod after CH7 discharge! YEA!

    SO, quick recap (read my other posts if you really want the entire story)....income severely reduced in 2009/2010....fell behind on mortgage in 2/2011....finally other factors combined to require a Chapter 7 BK filing in 4/2011. I did NOT reaffirm my mortgage in the BK. Filled out FHA HAMP loan mod request officially in 5/2011. Got the typical run around that everyone describes while I was in the active BK process...never got a straight answer etc...and they racked up fees associated with the BK filing etc...but they never did file an official NOD or request to lift the stay in place due to the BK.

    Finally discharged from BK in 8/11 - loan got transferred to "post-bk" department and several weeks go by without any action. Finally on 8/27/11 I contact Chase executive office. Loan mod app gets "escalated"....but still lots of run around (in underwriting - in QA - etc...). FINALLY got an assigned Relationship Manager, she is ok - keeps in contact as promised at least...but never had any real information.

    TODAY I SEE FEDEX pull up - I knew it was Chase, but honestly thought it might be the official NOD coming...(remember last payment was made in 1/2011), low and behold - LOAN MOD DOCS!!! YESS!

    It appears to me to be in house...no mention of trial period or anything - 1st new payment due 11/1/11 and nothing about further review later. Plus they extended out my term which I dont think FHA HAMP allows.

    Here is summary of details:

    Original outstanding balance - 140,200
    Old interest rate - 5.75 FHA
    Original maturity date - 5/2038 (So I had made 2.5 years of payments before defaulting)
    Original monthly payment - 1216.00 (includes escrows)

    Unpaid interest added to balance as part of Mod - 6045.00
    Escrow Advances made in default period - 1360.00
    Foreclosure/BK fees that are recoverable - 7400.00 (this is the one that kills! - but my fault)
    New Balance - 147,589.00 (not sure how the numbers add up to this since even if I take out the escrow fees there is still over 13K that could be "added" to the loan balance which to me would total 153K new balance...but I ll take it..).

    New outstanding balance - 147,589
    New interest rate - 4.5
    New maturity date - 10/1/2041 (so added 3 years to loan term)
    New monthly payment - 960.00 (includes escrows)


    SO, overall Im pleased! I know some of the payment reduction is due to my escrows going down (property taxes have dropped significantly since my original purchase due to revised assessments), and it sucks I end up having to pay 7K in "fees" due to my BK.....but the reduction of 1.25% in interest should more than make up those savings over time and the bottom line is my payment is lowered over 250 bucks a month. Combined with my BK eliminating all my other bills this payment is totally doable now.

    SO, I mainly post this as there doesnt seem to be many stories of modification after BK....so wanted to share a success story.

    Now I must sign and return these papers ASAP!

    Thanks for all the great information in this forum.

    #2
    Can you please explain why there were fees as a result of your bk? We went thru bk ch7 in july, got discharged Sept.12 2011 and we surrendered the home in the bk. I really don't want the house so I'm not interested in a loan mod. but hearing that you had fees has me perplexed and wondering if this something I need to worry about.
    Thanks. Glad things have ended well for you!

    Comment


      #3
      Actually, when I looked more closely after my post, I was NOT charged any fees (as when you take my original balance + unpaid interest + escrows they advanced while I wasnt paying that = my new 147,000 loan balance. And when you add up the interest and the escrow that comes up to the 7400 number in that line item.

      SO, as I say it appears they waived the fees that had been accruing (fine with me!), but there are LEGAL fees they can charge to file a motion to dismiss in court (in my case that was 650.00), fees to check on the house, late fees, etc...

      However, these only come into play if you want to keep the house....if you did not reaffirm, and are not interested in keeping the house...you ll be fine....in my case, I had expected, and am now surprised to find that they were not charged, to have them added to my new "modified" loan balance.

      Sorry for the confusion....but if you are surrendering the house in the BK, dont worry about it.

      Comment

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