Refinance mortgage in Chap 13

[jan cain]

I have been contacted by a mortgage broker who recommends refinancing, dismissing the 13 and negotiating with the creditors directly for settlements. I had several high balance creditors who did not present anything at the 341, and therefore are not included in the repayment plan. We are in a 5 percent plan, 60 months. We are just shy of 2 1/2 years into the Chap 13, payments are current. The broker says that the trustee may drag his feet okaying the refinance and that is why he wants to dismiss the bk. I am afraid that once the bk is dismissed, the creditors that didn't file at the 341 can come after us again. Why in the world would I want to pay creditors more than 5 percent if the only reason is that the trustee may take a while to okay the refi? Am I missing something or is this a scam? Would this broker get a kickback from the collection agencies or something? Any insight you can give would be appriciated. We have come this far and to have it go downhill again would really be devastating. Thanks!

[HHM]

Screw that, tell that broker to F' himself. That is a lousy idea. If you refinance your house and can take cash out, pay off the balance of your plan and receive your discharge.

[jan cain]

thanks for replying. That is what I said to him, about taking the cash out and paying off, and he said THAT was a lousy idea, because the trustees drag their feet. Can I insist we do it by paying off the bk no matter how long the trustee takes? Is there a time limit on the refi offers? This is the first broker that I have contacted (out of several) that said they can do a refi for us. I was so encouraged that someone said they could help us I gave him a chance. We haven't signed anything yet but I have sent him pay stubs, statements, the chap 13 schedule etc. Thanks!

[HHM]

You should talk to your chapter 13 attorney (assuming you had an attorney) about this as you will probably need court permission, or at least have the trustee consent in order to refi anyway. But once you pay the full amount of your chapter 13 plan, you are done. It doesn't really matter how long it takes the trustee to pay your creditors, your ONLY obligation is to pay the trustee.

[WillLowrey]

HHM Is right - the broker is just wanting to get paid. I know, because I am a mortgage broker and I do refi's of chap 13 - we get the trustee paid off. The only reason the broker wants you to dismiss it, is they want to get paid faster. RUN AWAY FROM THEM! There are plenty of brokers that can do deals like this (like myself) and that will work with you and the trustee to make it work out.

Also, I have always had to get permission from the trustee to even get the refinance moving. So, start there.

One thing to watch for if/when you do this - typically the mortgage company will request a payoff for your mortgage. Well, the system will generate the information and it will include any late fees, unpaid interest, etc. Well, when you get the payoff from the Trustee, it will also include the late fees, unpaid interest, etc for your mortgage. So, if you are not careful, you are double-paying the fees. The broker should take care of this by working with the existing lender and the trustee to get the numbers worked out. Normally, the lender can be convinced to give an updated payoff with the requirement that the trustee is paid the fees. Either way, you don't want to pay double.

I don't know where you are, but if you want to talk about it - let me know and maybe we can help you out. At the least, I can review anything you are getting for sound advice.

Good luck!

[sactoflynn]

Negotiating down unsecured ch 13 debt for early payoff.

I am currently in a ch13 for over 16 months with a 1% payoff to the unsecured debt now and want to refinance to buyout early of the 13. I understand that the plan then reverts to a 100% for the unsecured debt if paid off early. Does anyone know if it is worth my time to call the unsecured debtors to negotiate down the debt? I have over $50,000 in unsecured and if I were to complete the plan they only end up with $500. I have 2 years left on the plan. Most of the debt was the difference on my cars. Example: Owed $30,000 on Car, Trustee valued secured portion at $16,000 and unsecured at $14,000. Can I try to see if the auto lender would consider a settlement of say $20,000 (secured and unsecured portion?) I also understand that I would need to get them to submit modified claim to reflect the new negotiated amount.

Thanks

[Wyatt314]

You need to post a new thread. You're responding to an already asked question. I'm sure someone will be able to help you here.

[rainmand]

>>I have been contacted by a mortgage broker who recommends refinancing, dismissing the 13 and negotiating with the creditors directly for settlements

The Mortgage Broker is a predator and giving you terrible advice ... absolutely terrible. He just wants to get paid quicker and he's willing to make your life miserable in the process. Stay away from him.