Mortgage & car loan questions

[PoorAnnie]

We will be filing a ch 7 hopefully by Nov/Dec. We *need* to keep the house. Is it possible to get a lower payment on the house? If so, how do you do that? Call them before you file bk and talk to them about how hard it is to make the payment? Do you tell them that you are thinking about bk or not?

Also, we are keeping our one van and we will be 1-2 mths late on it so we can pay the lawyer. Will they take it from us? We will be able to get caught back up on it after we file bk (since we will be done paying the lawyer).

*Reason why we have to keep the house is we have 5 kids and 2 dogs, I don't know where we could live for less than are mortgage or even for that matter anyone who would even rent to us with 5 kids/2 dogs.

[JRScott]

You need to be current on the van at the time of filing. If you aren't current they can file a motion to lift stay and seize it.

Currently there is no power for a bankruptcy judge to lower your home payment in a bankruptcy. If you need to make up a payment it might be possible to move a payment to the end of your plan. If things go well you might could after 2 years refinance the home as that is the earliest time you'd qualify for a FHA backed loan.

[PoorAnnie]

I see you have replied to several of my posts, thank you so much for your help! This forum has been so informational and made me feel like I am not so alone.

[BigJohn]

You might want to check out this website http://www.995hope.org. Or call them direct at 1-888-895-HOPE.

This group, the Homeownership Preservation Foundation , gets a lot of federal money to help people to keep their homes. They can help in getting the morgage holder to lower rates, spread terms out longer, etc.

[sivuh5]

I was in a similar situation - needed to file Ch7, wanted to keep the house, knew I'd have trouble making the mortgage payment even after filing BK.

I called the bank (Wells Fargo) to ask what could be done since I was struggling to make my payments (did not mention BK). They would not talk to me at all until I was 3 months behind on my mortgage.

So, I had to play a "timing" game - allow myself to fall behind on mortgage (wasn't hard - I was barely making it) but hold off on BK until things with Well Fargo were worked out. It was a risk - if you have to file BK due to a lawsuit/wage garnishment (which I did) and you're not current on the mortgage, the bank can start foreclosure as soon as the automatic stay is lifted. The bank typically won't/can't work with you during BK because of the laws around trying to collect a debt when you're in BK. They need to cover their butts.

I got very lucky - I was able to hold off on the BK filing and after falling 3 months behind Wells Fargo put my mortgage into forbearance, which required me to make 1/2 payments for 3 more months. They said I was in the process of a modification to address the arrearage (total of $11,000 after the forbearance period) but I had to sign the forbearance requiring me to catch up on 11/1 in order to continue the process. Another risk, because I knew I couldn't come up with $11k by 11/1.

Meantime, a creditor filed a lawsuit and the judgement/wage garnishment is looming... I filed all the required paperwork with the court to fight the lawsuit, even though I know I owe the debt, in order to buy myself more time.

Finally a week ago I got paperwork in the mail from Wells saying that I qualified for the modification (they had asked for paystubs, tax returns, expenses and assets). They ended up lowering my interest rate by 2 percentage points and tacking on the arrearage to the end of the loan. This reduces my monthly payment by almost $400. Much easier to deal with!

My first payment for the modified loan is due 11/1, so I plan on waiting until after that to file BK (atty has all the paperwork now, just waiting to pull the trigger), because I don't want to jeopardize the modification. As I said, the BK stay prevents to bank from working with you to arrange a new payment plan and they will cover their butts instead of trying to help. I never mentioned BK to Wells thru all of this, and I don't plan on it.

I hope to keep the house at the new payment without a reaffirmation, but I don't know if they're going to require a reaffirm or not. I'll have to cross that bridge when I get to it.

Things are changing every day for the mortgage companies as more and more homes go into foreclosure. I don't think anyone can predict how an individual bank will react to an individual financial crisis anymore. I was one of the lucky ones who got the modification. I thought the best I could hope for was to put the arrearage at the end of the loan and go back to my regular payments. I had no idea they would lower the interest rate too.

Hope this helps.
S.

[BigJohn]

You might want to check out this website http://www.995hope.org. Or call them direct at 1-888-895-HOPE.

This group, the Homeownership Preservation Foundation , gets a lot of federal money to help people to keep their homes. They can help in getting the morgage holder to lower rates, spread terms out longer, etc.

If you go to the fannie mae website. http://www.fanniemae.com/aboutfm/bor...resource.jhtml, you will see that http://www.995hope.org is the only group they list for help. Going to your bank might help, but you are at their mercy.

Check your local area, there might be groups that help homeowners to try to keep their homes.

I want to get my first mortgage reduced before I file bankruptcy. If I can get the interest at a good rate, I will feel fine with myself. What I am shooting for is 5.5%. Does anybody know if this is reasonable?

[sivuh5]

Wells Fargo lowered mine from 7.625% to 5.625% fixed. This was thru the govt's voluntary program with the banks called Hope Now (although I dealt directly with Wells).

I did not propose a requested rate or new payment, just sent them the financials they asked for and waited for them to reply.

[RedLight]

I know for us, our atty is talking to both of our auto loan companies to attempt to lower our payments. We are reaffirming them and have never paid late. We are not reaffirming our mortgage, but have hardly any equity in it so there is no way they want to take it from us. Just find an atty that you are extremely comfortable with. Our atty is so accessible, we email or call and she replies in less than 5 minutes every time. That makes a world of difference.