Questions:

[SamanthaJones]

1) Why would a creditor not file a claim?
2) Why would a mortgage company refuse payments after a person is late?

[SinkingFast]

1) Why would a creditor not file a claim?
2) Why would a mortgage company refuse payments after a person is late?

If you're referring to a Creditor filing a claim in Ch 13,............ Many reasons.

Mainly,............Your debt to a Creditor like Chase, or Citi, or BoA, is less than a gnat's eyelash on an elephant's butt. It could potentially cost them more in Admin fees processing payments on your behalf from the Trustee than the Creditor would get back.

A mortgage company refusing payments probably happens after multiple payments in a row are missed. A one time late is one thing. People get busy in life and forget the date. Have some sort of unexpected expense that throws the budget out of kelter.

With as little as 2 consecutive missed payments, a mortgage loan can be moved from regular customer servicing to Loss Mitigation. If the loan is already placed with Loss Mitigation, the borrower cannot simply make up missed payments and go on from there. The borrower will probably have to officially reinstate the loan and pay a fee for that process.

[SamanthaJones]

Sounds counterproductive to me.

I would never refuse money owed to me, regardless of the 'rules'. So many foreclosings, and the economy tanking...to refuse a payment on a mortgage?

[SinkingFast]

Mortgage Lenders are really odd ducks.

Maybe a Member with experience in Mortgage Lending will explain it all better, but this is my understanding of how things work from our experience.

Typically, when you haven't yet filed BK:

Once you miss multiple payments in a row, most mortgage Lenders send your acct to "Loss Mitigation". At that point, your loan is "suspended" for lack of a better word.

In order for you to be able to resume regular payments, you'll have to pay a "Reinstatement Fee" plus all the arrears to move your acct back to regular servicing.

Until you pay the "Reinstatement Fee" Loss Mitigation can't take payments from you. If you were to Refi or somehow otherwise pay the mortgage in full, Loss Mitigation could work with you. Otherwise, they don't take payments.

Neither does the Foreclosure Dept. Same thing there. You'd have to pay in full or pay the fee plus all arrears to Reinstate the original loan. Once you Reinstate your loan, then regular customer servicing can resume taking your payments.

If you file BK, your loan moves to the Lender's BK Dept. That Dept has specially trained people who know what they can and cannot say to you when you call with questions. What they can and cannot do with your acct. At that point, if you're Ch 13, the mortgage Lender typically deals directly with the Trustee's Office to collect regular monthly payments plus the arrears owed.

[CPO]

Sink,

Whats your advice on making mortgage payments in a BK7.

If your current, never been late, file BK7 with reaffirmation in mind, complete your Statement of Intention so noted, will your mortgage company still send you statements? If you call them/send them written notice of your intent to reaffirm, will they generally cooperate?

If not, what process do you suggest for forwarding payment? Electronic debit...kinda forcing them to take the payments...or?

My mortgage co. is Countrywide. I've had few dealings with them as I have always been on-time or early with payment. They have never been a problem for me nor me for them.....

Thanks,

CPO

[SinkingFast]

We didn't actually deal with making mortgage payments in BK, CPO.

Our house went to Foreclosure. We had a buyer swoop in at the last minute. A flurry of paperwork and figures faxed back and forth. Our Lender, CountryWide, approved the deal, canceled the Foreclosure Sale and gave us 30 days to close. We actually sold our house and then filed BK several months later.

But others, both Ch 7 and 13, have posted here what they've been thru.

Most likely, CountryWide won't "bill" you during the BK period. Maybe not even afterward either. Some mortgage Lenders return the loan to regular customer servicing, some leave the loan in the BK Dept. Even if you follow thru with Reaffirming, you may continue to deal with the BK Dept the rest of the time your loan is with CW.

CW may send you monthly "statements" that will look like a bill. Somewhere on the statement will be a comment, something to the effect of "For Informational Purposes Only". That way you can keep track of your principal balance, escrow acct if you have one, and taxes and insurance payments made by the Lender. The "Informational Purposes" statement protects the Lender from breaking the Automatic Stay of the BK.

I would suggest you contact CW and see how they are gonna handle your loan. Many Lenders won't accept electronic payments from people in or post filing BK. You may even have to start sending your payments to a completely different address than you've had before.

You definitely want to get that info ASAP once you're sure you're gonna file. Also take that into consideration when planning the date you're gonna file. If you send your payment to the regular mailing address, your payment may not be properly credited. You could wind up showing a 1 month arrears even tho you actually did make the payment.

[spell]

Sink,

Whats your advice on making mortgage payments in a BK7.

If your current, never been late, file BK7 with reaffirmation in mind, complete your Statement of Intention so noted, will your mortgage company still send you statements? If you call them/send them written notice of your intent to reaffirm, will they generally cooperate?

Secured creditors, even if you are reaffirming will sometimes be very hands off prior to your discharge.
I always tell folks they're following the letter of the law respecting you as much as possible.
Even if somtimes it makes things more inconvenient.

Just call customer service, ask them where to send the payments, what info to include (account number), and mark on your calendar with a big red X when to send the payment.