Can you do a loan mod while in a 13?

[seanp951]

I am probably going to file a ch 13 in a few months.

i have a first and second mortgage. i plan to strip the second.

my house is worth about 220-240k.

1st = $300k
2nd = $75k.

even with the lien strip of the second.. my house will still be underwater and I suspect if I push things with the first.. or stop paying, i can get them to mod the loan. I got them to mod if a few years ago, but they only dropped my interest rate and extended the payments from 30 to 40 years.

would it be possible to mod the loan while in the BK?

here is another question - what if I contacted the bank and got them to convert my 40 year loan back into a 30 year loan so my monthly payment went up. would that allow me to put more money into my mortgage and less to the unsecured creditors????

[despritfreya]

Same answer as to your other post. Probably not going to happen. If it does and you are in a 13 then, yes, you might be able to reduce your Plan payment. However, your Trustee might oppose any motion to modify the loan or amend/modify the Plan due to lack of good faith.

I don't have a link to the thread but there is a poster here that is dealing with a Trustee and the Court demanding the surrender of the home as the mortgage payment far exceeds what apparently is deemed reasonable. Although the poster lives in a different State, it might be worth trying to find the thread just to see some of the thought processes.

Des.

[HHM]

"Can you?", yes.

"Will you?" Not likely. There is no legal restriction on doing a loan mod in a chapter 13, except that the bank will require a stipulated "lift stay" order to talk to you. Is getting a loan mod in an active BK common, no. And as Desp points out, your BK-13 trustee will eventually need to sign off which could yield amendments to your chapter 13 depending on what happens to the payment if the bank offers a modification.

On a side note, what are you hoping the modification will do differently this time? Aside from getting the term reduced back to 30 years, if the interest was already dropped, there isn't anything else that will happen. You certainly won't see a principal reduction.

And honestly, if the house is really that upside down, not sure why you are keeping it anyway. Should just dump it. It is going to take you 15+ years before you are even at break even on that house, not really worth it.

[momofthree]

You also normally need to be quite a bit behind in payments in order for the mortgage holder to consider a mod. Purposely defaulting while in a ch.13 is a big no-no. If you want to mod, have it completed before filing. Not to mention that the chances of the bank approving a mod which increases your payment is slim.