Loan Modification right after BK7

[illinois2009]

Hey, what kind of mod were you able to do with BoA, loan balance reduction? Rate to how low and do you have to pay the reduction back in a 5 years period or do you even have to pay it back?
It would help for my future negotiations.

TX

[illinois2009]

i found that web site too and i was able to find tons a info as well. I have already filled and my 341 meeting is may 11, I hope it goes smoth and then i be worried about mortgage later. Do you know if the trustee can ask for more pay stubs all the way up to discharge? I have a 100 commsision income and i never know what i make in future.

[Tifosi]

I can confirm that I received the same info. The judges in the Northern District of Illinois do not allow lien stripping.

[ShouldWeFile]

You can only strip your 2nd in a chapter 13. Not a 7.

According to 2 BK attorneys who practice EXCLUSIVELY in BK, "in this jurisdiction," they do not strip second mortgage liens under any circumstance....

[eddiep]

My lender is BoA, I have not filed yet but have been approved for modification. I told them I was filing bk, they did not seem to have any problem with that. The big problem with waiting until after you get discharged is whether or not to reaffirm. If you do reaffirm, you will get stuck with any shortage if you let the house go if you do not get a modification. on the other hand if you do not reaffirm, you will certainly have to reaffirm if you do get modification and not sure how they will respond if you have not reaffirmed. Risky either way, where you are underwater. My lawyer INSISTED on getting the mod signed sealed and delivered before we file. We have been approved but still waiting for "official" loan docs. I personally think BoA is one of the more reputable banks out there, your chances of getting a modification is probably better with them than with any other lender. I found another good forum www.loansafe.org that has tons of info and advice about modifications if you are interested, check them out.

[biotechsolution]

"stripping 2nd liens is not done in this jurisdiction" is the quote I received from attorney's who practice exclusively in BK's in IL...

Makes no sense to me - if it's unsecured, it's unsecured!

You can only strip your 2nd in a chapter 13. Not a 7.

[pcnet21]

"stripping 2nd liens is not done in this jurisdiction" is the quote I received from attorney's who practice exclusively in BK's in IL...

Makes no sense to me - if it's unsecured, it's unsecured!

That's what I thought...You should talk to other Attorney for verify that..

I settle with 2nd Mort before file Bankruptcy..$1 per $.20 which I should wait for bankruptcy...that time I did not think about file Chap7.

[ShouldWeFile]

You did not include your 2nd when you file Chap7?

"stripping 2nd liens is not done in this jurisdiction" is the quote I received from attorney's who practice exclusively in BK's in IL...

Makes no sense to me - if it's unsecured, it's unsecured!

[pcnet21]

True enough, but loan mods are still discretionary on the part of the lender, even if you qualify, the lender is not forced to give you a loan mod. Candidly, I think you are fighting uphill on this one, there is obviously no harm in trying, but you should have a plan in place if you don't get the mod.

That's correct..it is investor's choice but if you can show your financial hardship, most likely they will do the mod.

You did not include your 2nd when you file Chap7?

[illinois2009]

well, if not i would have to keep making payment and refinace in two years with FHA. Just hope rates are still low then .who knows.

[HHM]

loan mod is nothing to do with credit..it is all about income and expense. If you got discharged, you should be good to go.

Actually, you are better since your loan belongs to Freddi

True enough, but loan mods are still discretionary on the part of the lender, even if you qualify, the lender is not forced to give you a loan mod. Candidly, I think you are fighting uphill on this one, there is obviously no harm in trying, but you should have a plan in place if you don't get the mod.

[illinois2009]

thank you, it would be nice to reduce my mortgage after all credit cards gone so maybe i be able to save some money.LOL

[pcnet21]

A BK doesn't automatically disqualify you from a modification, but at the same time, I haven't heard of anyone getting a modification after BK.

loan mod is nothing to do with credit..it is all about income and expense. If you got discharged, you should be good to go.

Actually, you are better since your loan belongs to Freddi

[illinois2009]

well my loan is with freddi mac and i am over 42%, with 7 i can get ride of 35,000 credit card and then i can figure out a way to reduce my balamce or payment. even same payment with P/I is better than interst only. my rate is good (5.875) but it is an arm and i still have 3 years left. my second loan has only payment of $100 with 25,000 balance. my property tax is killing me but i do escrow, it is $8,100 each year.

[HHM]

What is your current interest rate?

In any event, your situation is difficult. The reality is, any modification will probably lead to an increase in your monthly payment not a decrease unless your current interest rate is exceptionally high.

You need to figure out two things
1. Is your loan backed by Fannie Mae/Freddie Mac?
2. Is your current monthly payment more than 31% of your gross monthly income.

If you answer yes to 1, then you may have a shot at a refi (but I wouldn't hold my breath because of the BK). If you answered no to #1, you are dead in the water for a refi. If you answer yes to number 2, you may be able to get a modification, but again, the BK will probably complicate things.

Visit http://www.makinghomeaffordable.gov/
For more info.

But candidly, you should consider walking away from the house, assuming your valuation is correct (if I were you, I would get a real estate agent to give you a market analysis), you are not terribly negative, but at the same time you are not paying any principal toward the loan. If the house is worth less than what is owed on the 1st mortgage, you may want to consider flipping your BK to a chapter 13 and stripping the second. I think long term, you are probably better off simply walking away from the house. Since you apparently qualify for a chapter 7, with a $360,000 mortgage, I can only imagine the mortgage payment takes up too BIG a chunk of your monthly income for you viably hold on to the house.