Helping Homeowners Save Their Homes in Bankruptcy Act of 2009, House Version

[MotherTrucker]

And, of course, the banks will take the position that in order to do the modification, the house must actually be "in foreclosure" (what ever that would mean under your state's law), vs just having a default notice or default and acceleration notice.

If that is the case, this could really screw over those that are already in a chapter 13. The bill, by its wording, appears to be retroactive to any chapter 13 that is still "open" at the time the bill is passed; but many of those with open 13's that could have benefited from a loan modification may not have let their house get to actual foreclosure before filing.

This applies to me. I have only one month of arrearage in my Ch. 13 and our loan adjusted the year after we filed. I frantically tried for a loan modification but was unsuccessful. We struggled but managed to pay it every month and we are current on our mortgage (and the rate is coming down now, thankfully). I'm sure there are others out there like me who grit their teeth when they see this bill. But, I'm not going to let it get to me. Onward!

[elster]

I thought currently surrendering your home splits into secured and unsecured. I thought the deficiency became unsecured and they were treated as an unsecured creditor.

I was hoping to surrender my house in full satisfaction. My 1st mortgage lender is causing me lots of trouble trying to be listed as a general unsecured creditor.

[justbroke]

I thought currently surrendering your home splits into secured and unsecured. I thought the deficiency became unsecured and they were treated as an unsecured creditor.

I was hoping to surrender my house in full satisfaction. My 1st mortgage lender is causing me lots of trouble trying to be listed as a general unsecured creditor.

This is mostly driven by your State's underlying non-bankruptcy laws. For example... California doesn't allow deficiency judgments on purchase money loans on a primary residence!

Other States don't allow deficiencies on non-judicial foreclosures!

[HHM]

Ugg, this thing keeps getting worse. The blue dog democrats adding some provisions, namely

1. That the homeowner attempted to receive a modification before filing BK and that the modification and whether the offered modification, if any, was reasonable. This burden would fall on the debtor...hello new court hearing in chapter 13's.
2. The mortgage be unaffordable (what does that mean), do we include debt payments to unseureds in figuring this...maybe this creates another chapte 20 secenario, discharge unsecured in chap 7, if mortgage is unaffordable, file chapter 13 to modify first...of course, after you spent 2-3 months wasting time trying to get the mortgage modified.
3. The bankruptcy court must use "federal appraisal guidelines" (ok, that would be great if they exsited).

http://www.************************/...-in-the-house/

[elster]

Looks like the bill passed the house today...

[spearmint]

I am working on a loan mod with my bank now - to reduce the interest rate. I need to file Ch13 at some point in the near future, too, so I am wondering if I can also put my home in Ch13 and get a principal reduction. Would that be allowed?

[HHM]

If you actually get a modification, then you won't be eligible to further modify the first mortgage in a chapter 13.

[eddiep]

HHM
Did you hear? BoA gave me my loan modification! Exactly what I wanted too. they extended the term to 30 years and lowered the interest rate on the loan that was at 9.9% to 6.9% for 5 years. Saved me $1030 a month! and no messing around in mythical chapter 20 land! Thanks for all your advice!

[worried]

I called my bank also which is USDA Rural Development (federal loan). They didn't know anything. I was told to call back next Wednesday because they are to have a meeting on Monday. I read they have more than one program. You can be current or behind. Still not sure where I stand in a chapter 13. If I am behind and I get caught up do I still get the modification or am I screwed all around. I just saw on the world news this morning that there are still hurdles for lowering payments through bankruptcy.

[worried]

oh i forgot to say... are there only certain banks participating in these programs like BOA, Citigroup, Wells Fargo, etc. Maybe mine won't be. Anybody know?

[pcn]

HHM
Did you hear? BoA gave me my loan modification! Exactly what I wanted too. they extended the term to 30 years and lowered the interest rate on the loan that was at 9.9% to 6.9% for 5 years. Saved me $1030 a month! and no messing around in mythical chapter 20 land! Thanks for all your advice!

Eddiep, can you give more details on what/how you did it? I have a 2nd mortgage with BOA (interest only) and would like to try modification with them. They were very accommodating when we talked today about modifying our 4 cc accounts - dropped payments in half. Thanks for any advice and details you care to share.

[eddiep]

worried

I found this for you (page 1 question 3)

http://www.financialstability.gov/docs/counselor_qa.pdf

According to this they are working on getting USDA set up for this program as well.

[eddiep]

The first thing I did back in December was contact the Home Retention Team. I have three mortgages on my home with BoA. In my case we had a hardship, my husband was out of work for three months and took a job that pays $800 less per month. The HRT told me to fax or mail in a hardship letter, 1 month of pay stubs, and proof that the taxes and insurance were paid.
What I found out after sending in second mortgage information twice is that BoA handles their first mortgages and second mortgages very differently. I live in NH and in my case my second mortgages were handled in Greensboro NC and my first mortgage was handled in Getzville NY. I was told by HRT twice to send all the information to NY. This is wrong, and they did not forward the information to NC. This wasted a lot of time! Twice I sent it, verified that they received it, waited a couple weeks, called to get a status update, and found out that NC never got it from NY. NC does not want you to send inthe information they only take info over the phone their number is 800 936-6362.
They will want to take all your financial information over the phone so be prepared. Figure out your numbers before you call. They are looking for a deficit but the deficit should not be more than $200 a month. They will want to know what you pay for heat, electric, cable, phone, cell phone, medical expenses, trash removal, HOA fees, groceries, car payments, insurance, taxes, any loans or credit cards, and any other mortgages.
The first time I spoke with the HRT I told them what I paid for cc, this was a huge mistake! I did not realize that I was going to file bk when I told her, and at the time I thought the bigger the deficit the better. With my cc payments I showed too big of a deficit. The second time I gave my financials I did not tell her about cc but she must have been looking at my old info and insisted on entering it even though I told her I was filing chapter 7. She says “a catch 22 I know but I have to add it”. I was denied because of excessive obligations.
Now I was pissed, I had faxed & mailed it twice, gave info on the phone twice and I thought it was ridiculous that they were denying me because of cc debt that I was not paying. So I sent an email to the executives at BoA.

In my email I mentioned
frustration with the misinformation I had received about where to send information
That we have never been late on our mortgage in 13 years, and still were not, and were denied a modification on first mortgage because of this
briefly explained our hardship and what a struggle it was to keep current on our payment and that we had reached the point that we were going to have to file for bk protection
we have our checking account and our children have their savings accounts with them.
We have stayed loyal to them throughout the years and had turned down many offers to refinance with other mortgage companies over the years.
That this was my home, where I was raising my children, and that we desperately wanted to keep our home.
I told them I did not feel like I was being treated as a valued customer.
I got a call from Loss Mitigation (first time they have ever called me) one week after the email. This was also the first time I spoke to someone who wanted to address all three mortgages. And I had already gotten written denials on all three of my mortgages. So I believe this person was instructed to call me because of the email. We went over the financials again. Of course I was not prepared with my numbers because I thought that she would just add in my cc again but she didn’t when I told her I was filing bk, so this time I showed a surplus of $11. She said she couldn’t do anything because it appears I can afford my payment! So I said ok lets go over the numbers again, since they are only estimates anyhow and that I could add in a pizza or two. She agreed and asked if she could put me on hold for a minute. When she came back on the line she said she had spoken to her supervisor she had been authorized to give me the modification. She entered all the information while I was on the line with her, she told me what my payments, interest rates, and payoff dates would be on all three loans and told me my first payment would be due on June 1st.

I told you it was a long story! I don’t know if this information will help you but hopefully it will at the very least save you some time. I also think you are lucky that your mortgage is with BoA. I think they are one of the most reputable banks out there right now. And things have changed a lot since I started this process and these are certainly unprecedented times. Don’t give up, if they tell you no, ask someone else, and keep asking until you get the right answer! Good Luck!!

[spidge]

I spoke to an attorney friend of mine about the "foreclosure clause" in this bill. There is an obscure case related to 401K withdrawals and the 10% penalty. One of the exceptions to having to pay the penalty is if you did the withdrawal to stop a foreclosure. The court held that the house had to be "in foreclosure" to get the exception from paying the 10% penalty.

And, of course, the banks will take the position that in order to do the modification, the house must actually be "in foreclosure" (what ever that would mean under your state's law), vs just having a default notice or default and acceleration notice.

If that is the case, this could really screw over those that are already in a chapter 13. The bill, by its wording, appears to be retroactive to any chapter 13 that is still "open" at the time the bill is passed; but many of those with open 13's that could have benefited from a loan modification may not have let their house get to actual foreclosure before filing.

Am I reading this correctly in application to my personal situation?
I did 3 hardship withdrawalls last year as a result of "Notice of Intent to Foreclose" and payed the 10% upon all disbursments. If I read this correctly I may be able to recoup those penalties that amount to $1,700 when I file my taxes?
Man that would be good news. Please advice.

[HHM]

Am I reading this correctly in application to my personal situation?
I did 3 hardship withdrawalls last year as a result of "Notice of Intent to Foreclose" and payed the 10% upon all disbursments. If I read this correctly I may be able to recoup those penalties that amount to $1,700 when I file my taxes?
Man that would be good news. Please advice.

This is a bit off topic, and I don't actually have the case site. Also, rules could have changed. If you actually applied for the withdrawals as a hardship, there should not have been/should not be a penalty