Mod after BK questions - papers say it's a new note

[eener]

I'm just so ready to have all of this behind us!

Last mortgage payment was July, 2011

Filed CH7 September, 2012. We filed at that time to stop foreclosure.

Stay lifted November, 2012

Foreclosure Judgement issued December, 2012

The judge told me that I was able to apply for a new loan mod. As soon as our bank got the judgement they sold our loan to a different bank. The Judicial sale was supposed to take place in February. The bank canceled it 4 days before the sale because we applied for a mod.

We just got the paperwork from the bank yesterday. It says it was sent 2nd day on 3/6 but UPS didn't deliver it until yesterday (I'm thinking it might have been with a neighbor, it just causes more stress. Tracking code says it was delivered last week). They sent a 2nd day envelope and said they must receive the signed documents by 3/14 - in 2 days! They want a down payment of 1 month, then they sent 3 payment coupons.

The problem we have is that every other sentence refers to the documents as a new note! It says it's a loan mod over and over but then says it's a new note (at least 20 times, seriously). It says that we agree to pay the total payoff (making us owe an extra 30k) and that they will go after us if we don't pay.

The original discharged loan was only in my husbands name - but the bank added me as a borrower in these new documents.

We were so relieved thinking that we were going to have affordable payments and had actually spent a little bit of money making our yard look better this past weekend. I'm glad I held off buying a storm door!

I spoke with the banks lawyer and the judge via email in January about the judicial sale and the lawyer told the judge to completely cancel it because we were working on a loan modification. Does this mean that the bank has to get a new judgement before it can foreclose? Or does that mean that since we aren't going through with the mod they can schedule the sale for May?

Should I call the bank? The person over our modification takes a minimum of 5 business days to return phone calls. She called me back last Wednesday and told me to expect the mod paperwork in a few weeks (that they were backed up) - but they had already sent it to me when she called!

If we want to avoid any thing else in public record, we should be out of the house by the time of the judicial sale, correct? We don't want an eviction on top of a CH7 and foreclosure!

If I need to clarify anything, let me know.

Thanks in advance!

[Drazil65]

Hi, this happen to us as well, pretty much same thing...new bank canceled sale and told court we were doing modification, ONLY WE WANTED THE SALE TO GO THROUGH!!!! We had no intention of doing a mod and called the stupid new bank and told them so. We never initiated a mod, never asked for a mod and certainly did not want to do one. They said they assumed we would want to do it, whatever. They bought our mortgage for pennies on the dollar from BOA and this whole thing could have been over by now.

So we sit and wait (we are now going on 4 months after the original sale date was supposed to happen) while they decide if they are going to foreclose. They are just sitting on it. We do not live there (in another state) and it is stressful to have this hanging out there and annoying truthfully. Yes, they have to refile to start the proceedings over and get a new date going. If you are still living there I would just stay there until the foreclsoure goes through and save your money in the mean time (no mod) you may be there for a while...

[tobee43]

i don't know where you are, but a judicial sale takes at least 24 months to complete a foreclosure on a good day.

secondly, be careful careful careful about those papers you sign. there are one of two things happening out there people must be aware of...one, a new modification which requires a large balloon payment at the end of the trial basis and two, a entire new note which gets them back on the grid...and that mortgage you have that was included in your bk is just that; your old note. many are so surprised to see a new note come soon after they have caught you their clutches only to find their loans were extended another 10-15 years. also you MUST request a amortization of the new loan to see exactly how it's going to work.

unless someone in writing was going to reduce my principle and include the amortization i would not sign a thing.

don't worry about an eviction, in a judicial state you have plenty of notice to leave and move out. again proceed with caution!

[brokeinfl]

It seems from reading about foreclosure, if you are staying in the property until sale, the bank appears to move much quicker. The folks that have moved on, seem to beg for years, and the bank will not sell. Is this SOP, or just coincidence?

[eener]

We definitely did not sign the modification

I sent the modification paperwork to a real estate attorney and my bankruptcy attorney. They both advised me not to sign and confirmed that it was definitely a new note. It also said that I agreed to not have any rights...what does that even mean? The real estate attorney said the part signing our rights away was illegal. The bank also started to report our mortgage on our credit reports as delinquent with foreclosure proceedings started before they ever sent the loan mod documents! We checked our credit report while our attorney was looking over the mod paperwork and noticed that they were reporting it. We disputed it right away.

Both attorneys said that since the bank already has a judgement (even though it was sold to a different bank after the judgement was entered) that they can sell it at any time and we were expecting it to be sold at the May 6th sale. They had to list it in the paper by April 18th and they didn't - so it will be in June at the earliest. I haven't heard anything from the bank and I didn't inform them that we were not signing the new documents.

There is nothing as far as rentals go in the area we want to live in. It's awful. A comparable house rents for $1700 and our loan mod would have made our payment $933. An apartment is $1400 a month and we make $45,000 a year ($2500 a month bring home). If something becomes available we will jump on it - but we are just going to wait in the house until it does. When they list it we will have a least 4 weeks notice (we have already started to pack and get rid of things) and we will just rent something outside of our desired town.

This is so stressful and I have been physically ill for the last month. I have had a constant migraine and I throw up at least 4 times a day - mostly in the morning. It's crazy what stress does to your body.

DH took a $20,000 a year pay cut after he lost his job 3.5 years ago. He hasn't had a raise at all since he started at this new company. He was getting overtime but that has completely dried up. A supervisor position opened in another department that he was going to jump on - but they decided not to fill it because the companies first quarter was awful and 20 million under the projected profit. It seems like every time things start to look up or we think we have a good opportunity to improve our financial situation - we get knocked back down.

[eener]

I forgot to add - the bank required us to have an appraisal done. The appraisal only came back at $160,000 - the loan mod was for $221,000! If we do find a decent rental we are going to attempt a short sale before the judicial/master in equity sale. At least that will spare us some dignity and the house will never be vacant and REO.

[eener]

Update. Still in the house, the bank wants to do a mod (ha) or have us do a short sale.

We are actually looking into a state program that pays all of our back payments (up to $45,000) as a loan. 20% of the loan is forgiven each year so after 5 years the loan is 100% forgiven. We are trying to do that plus a loan modification. Housing prices have actually gone up in my neighborhood because they are building a new school. Homes are selling for over $225,000 and we have the largest floor plan in the neighborhood and have a lot of upgrades. So maybe things will work out. If we did this loan (you don't make any payments) we would owe $187,000 to the bank and we would definitely sign a new note for that amount. DH should be making double his income in 2 years and we hope to keep this house as a rental and buy a new one. None of my plans ever seem to work out, but I really hope that this one does. It's the only thing I have felt at peace over since we first realized we were actually bankrupt in 2010.

I can't believe we just hit 24 months without a payment.

[LadyInTheRed]

When negotiating the loan mod, make it clear up front that you will not sign a new note. The offer they made really was a refi, not a mod. That is why they required an appraisal.

[Drazil65]

Agree with LITR 100%, do not sign a new note for a debt that was discharged. Look, the bank is going to try to get you hooked again for the money no matter what they have to do. If you do a short sale PLEASE be sure to read EVERYTHING they want you to sign (better yet PLEASE make sure you have an attorney for the closing documents). The bank that held our mortgage decided to accept an offer that made it a short sale after we put it on the market. We informed them up front that we would put it on the market while we lived there at the time BUT if an offer came in below what we owed it would be up to the bank to accept or not accept the offer and we would back away at that point. WE DID NOT REQUEST a short sale up front and therefore WOULD NOT jump through any of the short sale hoops (ie: all the financial paperwork typically required from the seller). We did not pay for ANYTHING, no appraisals, nothing, left it totally up to the bank to take care of everything. They did, it was a cash deal and they wanted it.

[subking]

They will do whatever they can to fool you, be very careful.

[eener]

Our loan was just sold to Fay Servicing - has anyone heard of them? It doesn't look like things are going to work out with SCHelp. Wondering how Fay Servicing is with loan mods?