Loan Modification offered?

[grandmasusan]

I'm about 7 months into my BK13. I kept my 1st and 2nd mortgages out of the BK plan as I thought I could handle the pmts. When I filed back in June, I was current. But I can't afford the pmts so I stopped making the pmts as of August at the advice of my attorney. I'm letting my house go, unfortunately.

Last week I recd a modification letter from my 2nd mtg company. They are willing to reduce the rate from 10.10 to 3.95for 3 years! What a great offer...too bad my home is upside down by 200k!

Here's my confusion. When I asked Chase who holds my 1st to modify my loan in Nov when the pmt went up to 7.65 from 6.15, they said due to my BK status, they could not help me by law.

So why is it that Ocwen was able to offer me a Mod?

Does anyone know???

[HHM]

Like most 2nd mortgage lenders, they are probably scrambling to salvage any loan they can.

Loan mods "during" a chapter 13 are somewhat of a grey area. The consensus seems to be that lenders cannot mod a loan independently of trustee approval. So, Chase is correct, to a point, but their statement is false by omission in that if you were to get approval from the trustee, they probably could do a loan mod. Ultimately, Ocwen would need you to get trustee approval to do a loan mod.

But, unless you asked Ocwen for a loan mod, they are probably in technical violation of the automatic stay since the mod offer represents an attempt to collect a debt.

[BKOnce]

New loan laws by Government now requires all major lenders contacting all borrowers who are currently 90 days late (and not in BK yet) to offer refinance and all lenders must wait and not proceed with forclosure/default notice (to help borrowers) right away until time out (3 mos).

[grandmasusan]

thanks HHM...nothing like having "grey" areas come up during your BK case. all of this is rather confusing. i sent a msg to my attorney letting them know that Ocwen contacted me for a mod. if chase who holds $572k was willing to do a drastic rate/pmt cut, i could possibly still keep the house. but it appears that chase wants to follow the letter of the law. too bad because they are probably only going to be able to sell my house for about $400k in the market that i live in.

[grandmasusan]

oh, one last thing...what happens if a lender is in violation of the automatic stay?

[HHM]

oh, one last thing...what happens if a lender is in violation of the automatic stay?

Generally nothing...them sending you an offer to mod the loan hasn't harmed you in anyway, so pursing the violation is mostly fruitless.

[grandmasusan]

thanks for the response...here's another thing that is weird about this whole thing. obviously the 2nd mtg holder (Ocwen) knows i am behind. their statements show my past due amount. when i get chase stmts, it just shows the current monthly pmt of $3600. it does NOT show past due but it does state that the last pmt received was aug 07. so how come i have not recd any paperwork from chase to start any foreclosure type proceedings? i'm am about 6 months past due without a peep from chase.

[HHM]

They need to file a motion to lift the automatic stay of your BK before they can proceed with foreclosure.