Relief From Automatic Stay - Mortgage

[sox1n05]

Hello All,

I am new to this forum, but seems like there are some good people here so I figured I would give it a try....

We filed chapter 7 last month and our court date is set for 7/8/10.

Today, we received a relief from automatic stay from Chase Home Finance. We have every intention of keeping our home.

The being said, we are currently between 60-90 days late.

As of next week, we'll be between 45-60 late.

Reading these papers, they want the relief so they can continue the foreclosure process. I understand that this is a normal process but all the information that I've read applies to those that are surrendering their property.

If I continue to make payments on the mortgage, what are the chances that they'll still choose to try and foreclose on my property?

I don't want to lose my house!

Any help that you can give me would be great.

Thanks,

sox1n05

[newbie2]

Hello All,

I am new to this forum, but seems like there are some good people here so I figured I would give it a try....

We filed chapter 7 last month and our court date is set for 7/8/10.

Today, we received a relief from automatic stay from Chase Home Finance. We have every intention of keeping our home.

The being said, we are currently between 60-90 days late.

As of next week, we'll be between 45-60 late.

Reading these papers, they want the relief so they can continue the foreclosure process. I understand that this is a normal process but all the information that I've read applies to those that are surrendering their property.

If I continue to make payments on the mortgage, what are the chances that they'll still choose to try and foreclose on my property?

I don't want to lose my house!

Any help that you can give me would be great.

Thanks,

sox1n05

When you file a Chapter 7 you are supposed to be current on all secured debt. (Home, cars, etc.) When you're not you run the risk of the lender asking to be relieved from the automatic stay, which is what has happened to you. There will be a separate hearing for that, and if you are not current by the date of that hearing the judge would probably grant the request.

Have you talked with your attorney about this?

[sox1n05]

No I just received it yesterday.

My lawyer however knew that I was behind on my mortgage when I filed. I don't care if they want to call me, etc. I just want to be able to keep my house.

Of course I get this on Saturday, so i have to sit this out until Monday....ugh.

So does this mean that they want to foreclose on our house?

[justbroke]

You and your attorney need to sit down and your attorney needs to explain how this works until you understand it. Going into a Chapter 7 and being behind in payments is a gamble. They can and usually do file for relief and then start foreclosure proceedings. You may be able to work on a modification as well, but at this point, you must realize that you may loose the home.

Also, you should be doing a serious financial review of the home, its value, and why you really want to keep it. The decision must be financial and not personal.

It reads as though you were already in the foreclosure process. They will continue it right where it left off, and if that means a quick sale date, then the sale will occur quickly. If you're in a State that is a non-judicial foreclosure and uses a Deed of Trust instead of a Mortgage... then you will probably also have a quick sale.

You took a chance by entering a Chapter 7 while in foreclosure and you and your attorney need to chat.

[sox1n05]

ouch, that's not good news.

I'll call them tomorrow.

Now we haven't had our court date yet. Can I amend the filing to a 13 instead of a 7 in case I can't get current with the mortgage?

[jenbow]

Thanks Justbroke for all your responses.. your information is invaluable on this forum.

[justbroke]

ouch, that's not good news.

I try to tell it like it is, but offer some hope. However, your situation is not unique and many people unknowingly enter into a Chapter 7 in your situation. I really place blame on the attorney for not having explained it fully or until you understood it.

I'll call them tomorrow.

Don't just call... setup an appointment!

Now we haven't had our court date yet. Can I amend the filing to a 13 instead of a 7 in case I can't get current with the mortgage?

This is where I will say you need to analyze your financial condition. Sure you can convert to a Chapter 13, but you really need to assess exactly what you're doing and exactly what impact these decisions will have on you financially... in the future.

I can't blindly say just convert to a Chapter 13. Chapter 13s are difficult at best and a person who doesn't know how to budget will never make it. I make no pre-judgment on you, but the reality is that most Chapter 13s fail.

Your best course may be a modification. You should have ALREADY begun talking to your bank about a modification. But that brings me back to square one... you must analyze your financial situation. If that home is more than 10% underwater, it's a no brainer for me to say... walk away! If you can strip a second or other junior mortgage from the property and close the gap between value and mortgage balance below 10%... then this could work in a Chapter 13.

So, I'm just going to ask... how much is your home worth? How many mortgages? What's the balance on each mortgage?

[sox1n05]

Alright, here's the info -

I owe 167,500

The market value (according to the bank) is 161,000

I am currently 75 days late (will make at least one payment before the end of the month to keep me from 90)

So I'm below that 10% threshold.

What I am thinking is trying to become current within the next 30 days if my bank will allow me to. Even if I need to borrow money from someone to help me get current.

The goal here is to keep the house.

I really want to stay away from a 13 if at all possible. Financially it doesn't make sense for us. We're surrendering one of our cars and keeping one. The one we're keeping is set to be paid off in eight months.

The only reason why I thought of a 13 is if I can't get the mortgage current. I have it from Chase and I was already shot down for the modification. I suppose I can try again though.

If I am 90 late, do you think the bank will allow me to come current in a set time frame without foreclosing on me even though we're already sort of in the middle of a foreclosure?

Everyone here is great - thanks for the help!

Mike

[justbroke]

If I am 90 late, do you think the bank will allow me to come current in a set time frame without foreclosing on me even though we're already sort of in the middle of a foreclosure?

Yes. Most banks will allow you to make up the payments. For each month you're behind, you get 4 months to make up the payment. Since you'll be 90 days late, you can ask for a "payment plan" that would pay the 3 months past due over 12 months. So if your monthly payment was $1,200/month and you are past due for 3 months, you'll pay an EXTRA $300/month ($3,600/12) for 12 months.

Banks are usually much nicer about granting the "installment/catch-up" plan over modifications and you don't have to go through the fuss. However, you really need to make sure you can afford the EXTRA $300/month (or whatever your calculation is). Many of these repayment plans fail as well.

If you plan to do the catch-up payments, you really should ALREADY be speaking with your bank. Remember, most of these departments within the bank don't talk to one another, so make sure they contact the foreclosure department with the arrangement!

As to your other question, if you want a Chapter 13, you should seriously consider a Chapter 20, if allowed in your District! That way, you can discharge all that unsecured debt in the Chapter 7 and immediately after receiving the Chapter 7 discharge, file a Chapter 13 just to cure the arrears on the home!

Again, this is something you can discuss with your attorney. If you're able to come current through a modification with your bank, that's a better move. However, these banks have and will continue foreclosure proceedings... and even foreclose on you... while you are in the middle of a modification! Also, you don't want a "trial" modification, you want an actual permanent modification.

Everything I wrote above is not a defense or offense to a relief from stay motion. The bank will still be granted relief unless you can prove some exemption impairment or that they lack standing. This, however, would not mean that they will foreclose on you, but that they have the ability (permission) to do so.