Possible to Modify a Mortgage Discharged in CH 7 ?

[MBeach222]

Has anyone had success in modifying a mortgage after discharge in ch 7?

My attorney says it could take two years or so before the bank forecloses and I'd have to leave.....but can I still modify the mortgage during that time?

I'm looking for options.

thanks

[Freddy03]

I have been told you can try to modify after discharge.

I'm in FL and was going to try to modify our mortgage but I'm not going to waste my time anymore with WF. I haven't heard a word from them since my loan mod was denied right before filing.

My attorney told me also it's looking like 2+ years before the house is foreclosed on.

[MBeach222]

Freddie, I am also in FL. Miami. I also have WF for both my primary mortgage and for a HELOC as a 2nd mortgage. I'd love any tips you might have. WF denied me for mod saying I did not have enough income, so I am thinking that I have more leverage to negotiate AFTER discharge than before. I could easily pay a reasonable mortgage, on a reasonable principal based on my home's actual value...by supplementing my income with IRA withdrawals.

I was hoping to verify that with people here on the Forum. Mod is possible after discharge? thanks

[Freddy03]

Freddie, I am also in FL. Miami. I also have WF for both my primary mortgage and for a HELOC as a 2nd mortgage. I'd love any tips you might have. WF denied me for mod saying I did not have enough income, so I am thinking that I have more leverage to negotiate AFTER discharge than before. I could easily pay a reasonable mortgage, on a reasonable principal based on my home's actual value...by supplementing my income with IRA withdrawals.

I was hoping to verify that with people here on the Forum. Mod is possible after discharge? thanks

I don't have much advice b/c I'm new to it myself. I have WF for both 1st and HELOC also. I'm about 130K underwater and my loan mod was denied b/c my mortgage/income ratio was just at 31%. I know they are not going to try and work with me b/c according to them I can pay the mortgage. My issue is I can rent a big, nice home and save about $900 a month down the street.

I know a mod is possible as long as it's not a re-fi.

[msm859]

I don't have much advice b/c I'm new to it myself. I have WF for both 1st and HELOC also. I'm about 130K underwater and my loan mod was denied b/c my mortgage/income ratio was just at 31%. I know they are not going to try and work with me b/c according to them I can pay the mortgage. My issue is I can rent a big, nice home and save about $900 a month down the street.

I know a mod is possible as long as it's not a re-fi.

When you say you are $130k under, what percentage is that? I.e. if owe $260k on a house worth $130k you should walk away now. If/when things get back turn back to normal it would take you @ 18 years to get back to even. In that time you could take the $900 savings per month and probably save over $200k.

[MBeach222]

I owe $660k (total of mort & HELOC, bithw with WF) and the home is worth $430k or so...

[HHM]

Well, HAMP is going to expire in a about 14 months, so you don't have 2 year to modify

Banks are pretty much wrapping up and firing their modification departments, and if you are that much underwater, what do you really hope to accomplish. There are no principal write downs. Get out while you can.

[Freddy03]

When you say you are $130k under, what percentage is that? I.e. if owe $260k on a house worth $130k you should walk away now. If/when things get back turn back to normal it would take you @ 18 years to get back to even. In that time you could take the $900 savings per month and probably save over $200k.

My mortgage balance with HELOC is $245 - Zillow has my house priced at $109. The house across the street (same style house) just sold for $89K.

[Freddy03]

Well, HAMP is going to expire in a about 14 months, so you don't have 2 year to modify

Banks are pretty much wrapping up and firing their modification departments, and if you are that much underwater, what do you really hope to accomplish. There are no principal write downs. Get out while you can.

Correct - this is what we plan on doing.

[HHM]

Post bankruptcy mortgage modifications are still a grey area that hasn't been substantially litigated. The issue is whether a post BK filing mortgage modification is a defacto reaffirmation of the debt. I would argue, no; but the concept has not been tested in court to my knowledge. The risk is that by modifying your mortgage after bankruptcy, you bring back to life your personal liability. Again, in my opinion, I think it is stretch that modifying payment terms and re-amortizing a loan creates that sort of new legal obligation, but it is still a risk.

But to strictly answer your question, there is no inherent restriction on modifying a mortgage after bankruptcy, the issue is whether the bank will offer one and whether you should even bother.

[Snax]

Because the actual numbers don't matter, I'll just say that we are underwater by a solid 25% or more on our home post-ch7. We paid to stay for 6 months, but rents for nicer places are less than what they want us to keep paying to stay, so we've stopped paying. Here in Oregon, that gives us a minimum of 180 days until we can be tossed out. I'm betting it will take longer, however we intend to solidify our own plans to move only after getting the notice of default. Until then, we are stashing the cash.

Attempting to work with the bank has been a non-starter. They don't even want to talk about a new note, but they are more than happy to improperly apply early payments while charging us a late fee! Suck it Citimortgage! ;)

[IamIrene]

Oregon here (as well - howdy Snax!). We're also about 25% underwater and are trying to figure out what the heck to do now. We're in an ARM and have plans to stop paying if it gets crazy. Just got a letter from our lender (Aurora Bank) saying our rate is expected to stay the same for the next 12 months. We shall see.

I suppose the good news is if we do decide to ditch the house, we can "stash the cash" for a while too and hopefully get more out of it than just 180 days worth, and since the house was IIB, no foreclosure will show on the credit report. I guess the real trick would be getting out of our name so our "clock" can start, but that should also be taken care of if the bank manages to sell the house on the court house steps.

*ugh* I hate this. I've got 2 kids in high school and all this uncertainty...I'm just gutted.

[LoveBubble5]

IamIrene, are you 100% certain that a foreclosure will not show on your credit report? I am in the very beginning of having stopped payment and that is something I wonder about, how it will show on my credit report.

And when you refer to the "clock," are you referring to the timeline after a BK or foreclosure? When does that start exactly? I do not understand your last line before "*ugh*..." I am so concerned right now with getting this done in the best order.

[tobee43]

IamIrene, are you 100% certain that a foreclosure will not show on your credit report? I am in the very beginning of having stopped payment and that is something I wonder about, how it will show on my credit report.

And when you refer to the "clock," are you referring to the timeline after a BK or foreclosure? When does that start exactly? I do not understand your last line before "*ugh*..." I am so concerned right now with getting this done in the best order.

once again, sometimes they show up and some times they don't. you can actually fight the credit bu's since yours was IIB.

and again, it's after the foreclosure is when the timeline begins not the bk. again you are in a Judicial state and it could possibly take years before the bank moves to foreclose on your house. hopefully by that time, the banks will crack open their doors a bit as many will be in the same situation as you.

[sadandconfus]

I was able to modify my primary loan after the bk7 and it now shows IIB on both my mortgages. Payments are 1773/month. I owe $317000 and zillow.com shows 220,500. There is a house a couple houses down that on zillow.com shows 230,500 but it is for sale for 225,000. The house for sale has a garage and mine doesnt so mine would definitely sell for less. I tried to modify the second loan but they said it was charged off after the bankruptcy. I can stay here and pay off the house and I would be okay, but I'm afraid the second loan may come back to haunt me. I'm in a townhouse and I want a detached home with a garage and a yard for my 2 young kids. This house is 25 years old and has some problems also, need new windows, no garage, probably a new roof, new appliances, new furnace. What do you think I should do? Let them foreclose and find a rental or live with my parents? What I really want to do is try to get a new mortgage and just move.