What to do?

[sherrenee]

Ok My husband and I filed chapter 7 in July and go to court for 341 meeting 9/21 (we had credit card debt). My question is we have a first and second mortgage the first mortgage is fixed, the second is not. The second mortgage comes due October 2011 (neither mortgage is behind).

I am worried that we will not be able to refinance due to our bankruptcy and due to our house being worth less than we owe (I estimate our house is worth around 160 k right now and we owe 175k as of now). My question is should we go ahead with chapter 7 and see what happens in two years or switch to chapter 13? Or file chapter 7 now and if the market is still bad in 2 years look at filling chapter 13 then?

If we switch to chapter 13 will it even help us in this situation? Are there any other ways to work this out?

[sherrenee]

Does anyone have any advice on what might help in this situation?

[Flowers]

I was under the impression that many banks were loan modifying the variable rates.
Did you talk with your lawyer about advice here?
Have you approached the bank>

My bank offered me a loan modification (on a fixed rate mortgage) before BK, then I filed and became under protection, then after I was discharged I went into Obama Home Affordability plan.

It would be best through to take the advice of your lawyer.

[sherrenee]

I was under the impression that many banks were loan modifying the variable rates.
Did you talk with your lawyer about advice here?
Have you approached the bank>

My bank offered me a loan modification (on a fixed rate mortgage) before BK, then I filed and became under protection, then after I was discharged I went into Obama Home Affordability plan.

It would be best through to take the advice of your lawyer.

No I havent really talked to anyone, I just know I am stressing. Our first mortgage is with Citimortgage and our second is with a local bank here. Both of our mortgages are current. Would I still be eligible for the mortgage modification after our bankruptcy is discharged (expected in November). I don't know anything about loan modification, what does that involve?

Would chapter 13 benefit this situation more so than chapter 7?

[Ann]

No I havent really talked to anyone, I just know I am stressing. Our first mortgage is with Citimortgage and our second is with a local bank here. Both of our mortgages are current. Would I still be eligible for the mortgage modification after our bankruptcy is discharged (expected in November). I don't know anything about loan modification, what does that involve?

Would chapter 13 benefit this situation more so than chapter 7?

Good old Citimortgage... yeah right. I have been waiting for well over a month just to see if I am qualified through them!!! They do not return calls... EVER.... I got a modification through another bank (for second mortgage) in about 30 days!! I HATE dealing with Citimortgage. Good luck!

[sherrenee]

Ok I talked to my attorney here is what he said

"The discharge date is not material to the decision under HAMP to modify your home loan(s) as long as the debts are reaffirmed in the bankruptcy process. You may recall that reaffirmation is voluntary and removes your bankruptcy discharge protection from a debt, or put another way, the debt survives the bankruptcy. To date, we have not received a reaffirmation agreement from Metropolitan for your home loan. I suggest you contact Metropolitan and start the process under HAMP."

My bank said they can't do anything until after discharge.

What should I do now?

We qualify for loan modification for sure...I am not as sure about loan refinancing due to the fact at one point we did get behind on our mortgage. We are now caught up and have been caught up since November.
Any advice is appreciated.

[brokeasajoke]

My lawyer suggested that we do not reaffirm any of the mortgages. Our primary is fixed; 5.875, 2nd is variable; prime +2 (currently 5.7) 3rd is variable; prime (currently 3.75.)

She said let the discharge go through, then start contacting the lenders to see about fixed rate modifications. She suggested that we take the stance at that point to not reaffirm but to get the modifications done on the original notes.

She did contact each lender to see if they would reaffirm to lower fixed rate, all said no.

I'm not "against the wall" so to speak on a set time for the increases. I know that prime will eventual start rising again but I'm hoping to buy time here if I can't modify. I will shed a 600.00 per month car payment in 6 months so that will help with the eventual rate increases. If I can make it a couple of years, I should be able to refinance the whole mess at a fixed rate and move on. That's kind of my worse case scenario.

I have read of several folks on this site getting mods after discharge. Search on "variable, mortgage, HELOC, ARM, APR, etc." I spent a few nights doing that and then talked to the attorney. I felt better knowing there are A LOT of different options out there. Hopefully, you and I both can find one to fit.