2nd mortgage charged off

[tredan]

My question involves bankruptcy in the state of: Florida

My wife and I filed CH 13 bankruptcy in early 2007, plan confirmed by the summer. Payments to both the 1st and 2nd mortgage holder have been made by the trustee starting about August of last year, payments from the trustee are both the arreages and current payments. Here is my dilema, while putting together my tax retuen for the 2007 year I noticed my 2nd mortgage holder only accounted for $36 in interest payments for the year. Looking at the trustees website they made payments for over $5000 to the regular payments, therfore my 1098 from this company should show more in interest payments. I contacted the 2nd mortgage holder and they tell me no payments have been made since 2006 and they have charged off the debt, although I see payments made to my loan online which the trustee has sent, but they are not applying these to my account since they charged it off as bad debt internally. Same answers from thier loss mitigation dept and BK debt. Called my lawyer concerning this, and they have been little help, stating that the company filed a proof of claim and whatever they are doing internally is your problem. finally I ended up talking to the director of the loss dept at the 2nd mortgage company, and he says he is going to look into this. He also stated I can offer to settle with them, through the trustee, to lift the lien this company holds on the property. What is the possibility of the trustee accepting this proposal, and also what is a fair settlement that the company might accept? Currently owed on the 2nd is about $52K. The property value is now about equal to the balance of the 1st mortgae holder. Any suggestions???

[lrprn]

What a mess! This is a prime reason why most Ch 13 filers insist on paying their mortgage payments themselves rather than having the trustee do it (not to mention that the trustee gets a % of your mortgage payments as an admin fee but that's another thread...)

You need to find out what the second mortgage is doing with the money the trustee is sending them monthly. If your trustee participates in 13Network or another ch 13 trustee website, you can check there to see when your trustee sent money to the second mortgage company and how much the checks were for.

Then ask your second mortgage company for a complete printout of the payments they have received and deposits to your account since your Ch 13 was filed. If your mortgage company balks, send them a RESPA letter so they have no choice but to cooperate. (To learn about your rights under RESPA (Real Estate Settlement Procedures Act), go to http://www.hud.gov/offices/hsg/sfh/r...smtgesrvcr.cfm . There's a sample letter link there as well.)

Somewhere in there between your trustee and second mortgage lender money seems to be disappearing - you need to find out where and fast.

[Flamingo]

lrpn is right. Where are your payments and where did they go? When you file BK, any mortgages paid in or outside the Plan get transferred to their BK section. Mortgage payments are then generally sent to another address, which should have been sent to the attorney if he is making the payments. Somehow, somewhere, your payments were probably sent to the old address by your Trustee and not going where they are supposed to go. You need to have your mortgage company do an investigation as to where those payments went. Get a letter from your attorney as to the dates and where the payments were sent and fax it to your mortgage company. When that is resolved, you will have to attempt to clean up your credit reports as to that mess but you will be armed with informatoin to do it.

Best of luck to you.

[tredan]

OK, so it looks like I need to send a letter in writing asking where my payments are going and what the status of the account is. Actual totals I see paid to the company since October show as $7704 according to the servicer website applied to "micelaneous repayment". From talking to the servicer on the phone so far they say that my account is not even in bankruptcy status as well.

As far as the Loss Mit director I spoke with, what is the possibility of settling the balance of the loan for less than what is owed?

[Flamingo]

OK, so it looks like I need to send a letter in writing asking where my payments are going and what the status of the account is. Actual totals I see paid to the company since October show as $7704 according to the servicer website applied to "micelaneous repayment". From talking to the servicer on the phone so far they say that my account is not even in bankruptcy status as well.

As far as the Loss Mit director I spoke with, what is the possibility of settling the balance of the loan for less than what is owed?

There is a screw-up somewhere in the system as to your payments and it just needs to be resolved. All you need, as I previously stated, is a letter from your attorney showing the dates of payments and where sent. Your mortgage company should take it from there and repair your account information.

As to your question of settling the mortgage balance for less than what is owed, since you are in Chapter 13 that is a question you would need to ask your attorney.

[RickInMich]

tredan, when and if you are able to work out a settlement with the 2nd mortgage company, will you let us know what happens? We have a 2nd, too, but we've stopped paying. (We're a chapter 7) I was wondering if it was at all worth trying to settle with them at some point so we could keep the house. The value of our house at this point is equal to the 1st mortgage. Our 2nd is about 42,000. I was hoping they would settle for like half. Don't know if that's even possible.