Foreclosure process started while I am attempting a loan modification-Chase

[skibum]

So I get my mail today and I have letters from the firm hired by Chase and the public trustee of my county telling me my home is in foreclosure and it will be sold October 14. I am in the process of trying to modify the loan, and I am going to apply for the new money to help homeowners make their payments for two years, up to $50k. I think my wife and I fit all the criteria.

I was under the impression that the foreclosure proceedings would be stopped if we are trying to do a loan mod. What should my next step be? Is there a way to stop the foreclosure proceedings once they have begun? Thanks.

[sh9730]

Well...there are other posts about this...I think Des just wrote about this the other day that there is no LEGAL reason why they have to stop foreclosure proceedings once in default and there are numerous examples of what you are going through posted throughout various internet forums.

HOWEVER, though I would be the last one to disagree with Des on anything (he is a smart guy!), my reading of the HAMP guidelines at least is that once in HAMP review, all FC proceedings are supposed to stop during the review. But since HAMP is a VOLUNTARY thing (banks do not need to participate), I see where Des is saying they can do whatever they want as per the law.

NOW, in my personal case, I am with Chase also, have an FHA loan, was behind and filed CH7 before they actually filed the "official" notice of default. Chase immediately filed for relief from the automatic stay (standard procedure) so they could move forward with collection/foreclosure activities. But, when I applied for an FHA HAMP modification, they withdrew that motion and as I get closer to discharge they have not tried to file it at all again, in essence limiting their options until after discharge.

I am still in "underwriting" for the modification and had to send them another document yesterday (proof I am still in the residence), so we ll have to see what happens in a few weeks once I am discharged (and they can legally begin FC proceedings again if they wish without penalty from the court). Again, since I am in review for a HAMP modification, my BELIEF is they will not start any formal FC proceedings until that review is completed. But we ll see.

Again, if you are not being reviewed for HAMP, like just an in-house modification, they probably can dual track (FC and review mod at the same time) as they wish like Des says.

My experience is you have to treat this all like a part time job...call them after every step...and every few days to make sure nothing falls through the cracks....if you need to get to a supervisor, do so.

Of course, if you file BK, you buy yourself a little time right there as all activities must stop until the court approves them.

Hope this helps.

[skibum]

One other question: can I still play the hampster wheel game now that the foreclosure has begun? Shouldn't the foreclosure be withdrawn while I am attempting to modify?

[skibum]

Thanks SH. I will look at the other posts, I just panicked again as usual, and wanted to get a quick post in.

[despritfreya]

Well...there are other posts about this...I think Des just wrote about this the other day that there is no LEGAL reason why they have to stop foreclosure proceedings once in default. . . HOWEVER, though I would be the last one to disagree with Des on anything. . . my reading of the HAMP guidelines at least is that once in HAMP review, all FC proceedings are supposed to stop during the review. But since HAMP is a VOLUNTARY thing (banks do not need to participate), I see where Des is saying they can do whatever they want as per the law.

I believe what happens (even under the "guidelines") is that the lender/investor is able to begin the foreclosure process. The lender/investor simply will not complete it until the borrower is "denied" the modification. In my state, the lender/investor will "roll" the sale date every 30 days and, if the modification is successful, will eventually cancel the trustee sale. If not successful the lender/investor will complete the trustee sale at the next scheduled "rollover" date.

OP should proceed with the attempt at modification.

Des.

[sh9730]

Des (and OP),

Here is a pretty good summary of the new guidelines and how they apply to BK:

http://www.foreclosurelawfirms.com/resources/foreclosure/foreclosure-and-bankruptcy/hamp-guidelines-help-homeowner

The way I read it is IF you have not already been placed into "foreclosure status" (not sure if that means just a notice of intent to accelerate of the official Notice of Default - my guess is the latter), they must review you for the mod FIRST.

If they have already filed the official NOD (as it sounds like may have been the case with the OP), then as Des states, they cannot (or at least should not) conduct the sale until they have denied you, AND you have had a chance to contest that denial.

As Des says - in any event, you should proceed with the Loan Mod attempt....at a minimum it should buy you time. But you still have to keep up on it.

As for the "Wheel", yes, you can still do that if that is your end goal....I myself am trying to STAY in my house....and Im sure the lenders/servicers are getting wind of the game and Im sure will soon have roadblocks up to stop players....
There are also some new rules regarding BK, which I am trying to apply right now.....not sure how those are going to play our yet.

[tobee43]

chase sent the summons for the foreclosure right in the middle of our loan mod, so it stops nothing.

HAMP is an oxy moron, if you could afford the mods they offer you, you wouldn't need one in the first place.. or ....better yet...how's this deal...

ok...we will lower you monthly payment X but add it to the end of your 5% mortgage loan at 30%....like that one...LOL!!!

anyway, we didn't even answer our summons since we knew after 33 years we just couldn't manage anymore with losing our jobs and getting so ill we had over 200k worth of medical bills. by the way...it's been well over 3 years and Chase has yet to foreclose, however, we did surrender the house in the bk.

good luck to you!!

[skibum]

Thanks everyone. I should never panic until I post!

[sh9730]

Tobee,

Yeah, Ive read a lot of stories like yours about HAMP from a couple years ago....but there were some rule changes in Dec 2010 (as those I mentioned above as well as others) that SEEM to have made the process better from what I read elsewhere. Many more stories of success this year than in the past. The BK stuff still is sort of an unknown, not a lot of experiences written about yet since its sort of new.....but Im hoping they work out. Not counting on it....but would be nice!

[CCsAreEvil]

while on the trial loan mod payments, they just kept postponing the auction sale date... somewhat scary, but they did keep postponing it each and every month until the perm loan mod was done.

[tobee43]

Tobee,

Yeah, Ive read a lot of stories like yours about HAMP from a couple years ago....but there were some rule changes in Dec 2010 (as those I mentioned above as well as others) that SEEM to have made the process better from what I read elsewhere. Many more stories of success this year than in the past. The BK stuff still is sort of an unknown, not a lot of experiences written about yet since its sort of new.....but Im hoping they work out. Not counting on it....but would be nice!

yes, our was prior to 2009 actually we attempted a modification prior to HAMP even exsisting. then when it came into effect it didn't help us anyway!