Mortgage Modification Questions

[ace300s]

Recieved a call from lender (citi). Offering a loan modification of the existing loan. They will reduce my interest rate by 2.56% and payment by $346 per month. They want a down payment equal to two months payments. This is not a new 30 year loan, just changing the interest rate on current loan...The past due payments will be added to the end of the loan.

History......I filed BK7 in 02/12 and discharged in 06/12. Home was included in BK7. I have not made house payment in 15 months.

Questions;

Because this is just a change in the current loan. Will the loan that was discharged in BK7 still be considered discharged if I agree to the new terms?

I'm not reaffirming the loan? yes/no?

Can they come after me if I default down the road?

Should I try to counter with another 1% reduction?

Its almost too funny! I've been thinking about what to do for 15 months now. Now its decision time and I'm still not sure what is best....Our new payment would be less than rent on a much smaller place here in Northern California.

Any advice or comment would be a big help........

Thanks

[LadyInTheRed]

Because this is just a change in the current loan. Will the loan that was discharged in BK7 still be considered discharged if I agree to the new terms?

Yes. A modification does not change the fact that the loan was discharged.

I'm not reaffirming the loan? yes/no?

No, you are not. The only way to reafirm a loan is to file a signed reaffirmation agreement with the BK court and have it approved by your attorney or the judge.

Can they come after me if I default down the road?

They can't come after you personally. But, they can foreclose.

Should I try to counter with another 1% reduction?

My guess is that their first offer is their only offer. But, I don't really know. It would be a shame to blow your chance at a mod. What rate are the offering?

ETA: Before you send the down payment, read the documents carefully to make sure that you are guaranteed the modification if you make the payment.

[ace300s]

ETA: Before you send the down payment, read the documents carefully to make sure that you are guaranteed the modification if you make the payment.

They're telling if I agree they want the down payment first and then they'll send me the papers to sign.

[sh1035]

They're telling if I agree they want the down payment first and then they'll send me the papers to sign.

I had a friend do that to the tune of 16k and all along they never stopped the foreclsure and house was sold at auction. I would not send a penny until it was signed and delivered.

[LadyInTheRed]

Yeah, don't send a penny until you see the documents stating that sending a penny will guaranty you a modification. Never trust what some guy tells you on the phone.

[ace300s]

Here's the way they explained the downpayment to me....

They say that many lenders do a trial payment plan for three or four months before final approval. Citi approves you upfront and asks for a downpayment equal to two months payments, sign the papers and its complete.

This is not a new loan, refinance, etc. It just lowers the interest rate and payments on the remaining life of the existing loan.

I'll keep everyone updated on how it turns out........

[LadyInTheRed]

Citi approves you upfront and asks for a downpayment equal to two months payments, sign the papers and its complete.

They should be able to put that in writing before you make the payment.