Modify a Mortgage after Ch7 ?

[MBeach222]

My Ch7 was discharged a year ago. I surrendered the home. Has anyone heard of getting a mortgage modified after BK?

I would guess that the bank has less leverage after Ch7 and might be more willing to settle for less. Anyone do that?

thanks

[Floridagail]

The only Mod I would consider would be principal reduction, and they are very rarely done. Banks want to just reduce your payments for a certain period of time and you are still upside down. I also worry about being responsible again by signing something. No way we will do it.

[drowning123]

A loan modification does not re-establish liability on the loan. The bank cannot sue you for any unpaid balance in the event you walk away from the house. If you stop making mortgage payments, the bank can only foreclose on the property.

The loan is not being refinanced. Refinancing the property into a completely new loan would re-establish liability, but not a loan modification. The only way you can be liable is if you signed a reaffirmation agreement with the bankruptcy court.

By the way, I got a modification after I was discharged. My interest rate for the balance of the life of the loan is 2.5%. Good luck!

[LadyInTheRed]

The only way you can be liable is if you signed a reaffirmation agreement with the bankruptcy court.

Exactly. You can't accidentally reaffirm a loan that was discharged in Bankruptcy. In fact, you can't even do it intentionally.

[jst4f]

As best I can tell BK has no impact on the bank relative to a loan modification. In most cases, but not all, you will get the slow "no". I have read about various strategies to get the bank to listen. Maybe drowning123 could share their story and strategy.

[OweTooMuch]

I was sent an unsolicited modification after my Chapter 7. I do believe the bankruptcy definitely helped.

[sofarsogood2]

Yes, it can be definitely be done- but it isn't easy.

You have to know the HAMP rules, meet the guidelines of either HAMP or the Banks private mod program.

You have to have a true hardship.


Know who the investor is for your loan- not the servicer who bills you- the investor. Many are Frannie/Freddie loans, which has it's own rules for modifications that you can look up. You can check if your loan is Freddie or Fannie by googling Fannie Look Up Tool and Freddie Look Up Tool.

Each case is different. You may be denied several times, be given the run around. You have to be diligent and a very squeaky wheel.

Find and read the current HAMP Guidelines for Servicers to help you see if you qualify- and to call them on it when they don't follow the rules.

Only about 30% end up getting a mod- but BK itself doesn't preclude anyone.

If you have an FHA loan, you may qualify to refinance to low rates even if you are underwater- with no upfront fees.

Google is your best friend. There is a lot of info out there-

You have to do a lot of research, but maybe the above info. can get you started.

Good Luck.

[drowning123]

I had no strategy. I just applied got denied the first time. I tried again and got denied for one type of modification and got approved for another. I guess my income-to-debt ratio helped. Not sure. I'm also a single mom with two elderly parents, so I have 3 dependents, plus myself.

[blockhead]

Just found this more appropiate thread

Looking at the loan mods out there at the Registry (form 3179) they seem to reaffim the (discharged) mortgage by using language like "promise to pay". Looking at some HUD notes it seems for Ch7 dischargeees they might change the form in some unspecified way. Has anyone encountered this? The mod WF gave me isn't that great (dropped interest from 6 to 5%) and I'm in two minds as whether to refuse it. I don't really want YET another public record at the Registry as in "Subject has a discharge in bankruptcy".

Looking at this thread, it seems that even if I sign the mod the debt is still discharged.. seems sloppy language leading one to believe the loan is actually being reaffirmed even if it isn't. But I can live with it over the explicit statement that I have a Ch7 discharge