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Sample motion asking the bk court to approve a loan modification

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  • Sample motion asking the bk court to approve a loan modification

    Below is a sample of how one can formulate a Motion to approve the loan modification while still in bk. Lenders are now requiring Bk Ct approval and there have been a number of threads relating to this. Since we are not talking "rocket science" I thought it would be nice to lend one of my motions to this forum. Please note that, depending upon your jurisdiction, the filing of the Motion is only the 1st step to obtaining Court approval.

    1. Draft and file the Motion;
    2. Either you will then have to obtain a hearing or draft a Notice of the Motion;
    a. If your jurisdiction requires a hearing you will have to get a date and then draft, file and mail to all creditors on the master mailing list a "Notice of Hearing;
    b. If your jurisdiction allows "negative notice" you will have to draft a Notice of Motion and Time To Object. This will have to be filed with the Court and then mailed to all creditors on the Master Mailing List. The Notice, which gives details of the Motion, usually states that the recipient of the Notice has 21 days to object. If no one objects then you can file an Order approving the Motion. If someone does object (unlikely) then you will have to set the matter for a hearing.

    ______________________ Here is the sample Motion_______________

    MOTION FOR AUTHORIZATION TO MODIFY RESIDENTIAL MORTGAGE:

    1. Debtor filed her voluntary petition under Chapter Thirteen on ___________. The Chapter Thirteen proceeding either has been or will be converted to a Chapter Seven.

    2. During the course of the Chapter Thirteen, the Debtor
    began negotiating with her first mortgage holder, ____________, for a loan modification as it relates to her homestead residence located at __________________________.

    3. The Debtor was ultimately successful and was offered a
    loan modification under terms and conditions that are agreeable to both the borrower and the lender. To finalize the transaction the lender is requiring the approval of this Court.

    4. Debtor has been given the opportunity by (LENDER’S NAME) to modify the Promissory Note secured by a first position Deed of Trust against her homestead residence.

    5. The modification of the home loan which amends and supplements the Mortgage Deed of Trust dated ____________ and recorded on ______________as document number ____________ in the Official Records of _________ County, will allow the Debtor to reduce her overall costs under the following terms (Describe the terms- for example):

    a. The principal balance on the Note will be $__________;
    b. The Note, as modified, will bear fixed interest rate of ______% which is a reduction from the current rate of ______%;
    c. The loan shall mature on __________, 2035; and
    d. The monthly “PITI” payment shall be $________ (subject to any necessary future escrow adjustments).

    6. It is understood by all that the Debtor will be converting or has already converted the Chapter Thirteen to a Chapter Seven and that any Discharge entered by this Court will be in the form of a Chapter Seven Discharge. It is further understood that the approval of this Motion will not be in the form of an approval of a Reaffirmation Agreement and, should the Debtor default under the terms of the loan modification, NAME OF LENDER's sole remedy will be to exercise its rights against the collateral.

    7. Said modification is necessary in order to allow the Debtor to continue to reside in her residence. Continued living arrangements under the current condition is not feasible.

    8. All preliminary steps to complete the modification have been provided for. Attached to this Motion is a copy of Modification documents. (make sure you attach a complete copy)

    9. The Trustee is to have no objection to the Modification.

    WHEREFORE, Debtor requests this Court grant the Motion for Authorization to Modify Residential Mortgage.

    Respectfully Submitted this ____ day of ______, 2010.

    _______________

    Best regards.

    Des.
    Last edited by despritfreya; 11-12-2010, 09:47 AM.

  • #2
    i hope someone makes this a "sticky" des...i'm emailing to myself for further reference...thanks so much for all your work!!
    8/4/2008 MAKE SURE AND VISIT Tobee's Blogs! http://www.bkforum.com/blog.php?32727-tobee43 and all are welcome to bk forum's Florida State Questions and Answers on BK http://www.bkforum.com/group.php?groupid=9

    Comment


    • #3
      Des, thank you for this!
      Question - can we do something like this if we file a ch7 in CA? TIA!

      Comment


      • #4
        Originally posted by NewStart2012 View Post
        can we do something like this if we file a ch7 in CA? TIA!
        Yes, assuming the case has not been closed. The above sample was actually going to be for a Chapter 7 but we needed to get it filed before we converted the case - hence the reason there is a reference to the conversion - I did not know if, by the time the Court entered the Order, the case would be a 13 or 7.

        Des.

        Comment


        • #5
          Thank for the reply Des. No, case hasn't been to 341 yet. Another question - can this be modify to say we're in the middle of a modification and woul like the court to help "encourage" the lender to be open to an equitable modification? I read one of your other posts where another state had the bk judge/court "make" the lender negotiate a modification. Thanks!

          Comment


          • #6
            NewStart,

            Unfortunately the bk court does not have the authority to intervene in an effort to coax a modification. The "sample" posted (or something similar) is used when a modification is approved by the lender but the lender wants the bk court to "bless" its actions. Some judges may request that the lender participate in non-binding mediation before it will approve a Motion for Releif From Stay but those are few and far between. You would have to ask an attny in your district if your particular judge is one of them.

            Des.

            Comment


            • #7
              Thank you again Des. Will do

              Comment


              • #8
                Originally posted by despritfreya View Post
                Yes, assuming the case has not been closed. The above sample was actually going to be for a Chapter 7 but we needed to get it filed before we converted the case - hence the reason there is a reference to the conversion - I did not know if, by the time the Court entered the Order, the case would be a 13 or 7.

                Des.
                Hi Des


                Just received both my mortgage modification agreement and chapter 7 discharge letter the same time. The modification agreement stated that they need court aprroval if I am in bankruptcy proceeding. Am I considered still in a bk proceeding although I am discharged already? Do I just need to talk to my mortgage servicer that I am discharged (they may have not received the letter yet) and hence, they should not require the court approval? I am confused. Please enlighten me.

                Thanks,
                JDS

                Comment


                • #9
                  Originally posted by jds View Post
                  The modification agreement stated that they need court aprroval if I am in bankruptcy proceeding. Am I considered still in a bk proceeding although I am discharged already? Do I just need to talk to my mortgage servicer that I am discharged (they may have not received the letter yet) and hence, they should not require the court approval?

                  This is a good question. I am not sure of the answer. Your discharge did not remove the property from the bk estate. The closing of the case or an abandonment by the Trustee does that. I am not sure if the lender requires the removal of the property from the estate or simply the entry of the discharge. Unfortunately I think you need to ask the servicer and hope you get the correct answer.

                  Des.

                  Comment

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