BK and Foreclosure--Complex Situation--Long

[cariba]

A friend of a family member called me yesterday after attending a special hearing with her mortgagor for her Ch.7 case. The mortgagor is Countrywide.

 

She was very upset and excitable when explaining this to me, so I will try to piece this together as best I can. If any persons responding need clarification of the details, I can obtain it. Here goes:

 

Last year the husband filed a Ch. 13 case. He paid money to the trustee which in turn was paid to Countrywide on their mortgage. None of these payments were posted during Aug. thru early Dec. last year. The husband's Chap. 13 was dismissed when he became unemployed last year. Countrywide rushed to commence foreclosure action. They claimed to have not received any payments.

 

Now, the wife tells me that there according to some HUD Admin Code, 4330.1, Countrywide cannot foreclose their FHA mortgage before 120 days of delinquency and they have to give them reinstatement. Now, the wife claims that in addition to the trustee payments, they made regular mortgage payments, so there were actually double payments. They were also never giving any notice of the commencement of foreclosure action, etc. Apparently the trustee's payments were thrown into an expense account and after she called, they were not posted until Dec., and they were not posted retroactively, so it appeared that they were about 7-8 months in arrears.

 

Turn to Feb. of this year. The wife files a Ch. 7 case because she had some investment property that was foreclosed. She wants to reinstate her Mortgage Broker license (for GA), and she can only do it by clearing up this foreclosure. She also wants to use the Ch. 7 to stay the foreclosure proceedings.

 

She attended the special hearing yesterday, and the judge basically told her that section 521 2 (a) does not apply--there is no stay--and she cannot "keep and pay" her mortgage (in the judge's words).

 

The same attorney who handled her husband's Ch. 13 is handling her Ch.7. He seems to do nothing more than agree with the judge. He told her that he didn't think she file an appeal or a reconsideration on the mortgage issue. It sounds to me like this case may be a little more complex than anything else he has handled in Bankruptcy Court.

 

This is all taking place in the great state of GA. Also, Countrywide has refused to respond to any correspondence she has sent, and is refusing to accept payments as well.

 

I promised that I would try to find out something for her, as well as try to find the legislative history for BK code, section 521 2 (a).

 

It appears to me that there is information missing here. What do you all think she should do in this situation? File an appeal on the mortgage issue? File for reconsideration? It's complex. I hate that my first post here is about such a confusing issue :oops: but, when people find out you know a little about credit, they expect you to know it all!

 

Thanks in advance!

 

Cariba

[Venus]

Tell your friend to contact her state's attorney general for consumer affairs. Countrywide has to do what the AG tells them. They have to hand over what ever documentation the AG asks for.

[Venus]

Ooops! I didn't see that the judge had already ruled.

 

If you are dissatisfied with the judge's decision, contact the U.S. trustee for your part of the country. This is a much higher authority than the judges.

 

If an injustice has been done or if justice is still being sought, they will square it all away in no time.

[cariba]

Thank you Venus! I will pass the information along!

 

Cariba