snax

Apparently they will also still send you a bill for overnight delivery of it too - whether you use it or not! Oh well, that $15 was worth it to have a backup plan.

Don't get too hung up on Cap1. If they sent you a check, there's a good chance the F&I person at the dealer can hook you up with something even better. We took ours to the local dealer this week and they were able to beat Cap1 AND get us into a Ford Credit loan on a new car at a lower rate (which also provided another $4k in incentives). This just 6 months after discharge from Ch. 7 BK.

UPDATE: We have modification! We don't have it signed and closed, but the modification closer called me today to spell out the basics of our mod which will be effective with a 1st payment due on July 1. Have I mentioned that we haven't made a payment since February?? Apparently that is not an issue that they consider in terms of whether or not to close on the mod, as we did fully meet the terms of the trial period as spelled out, but they have added the interest onto our original balance for the new loan at a fixed 5.25%. That puts us upside down by at least 30-40k. While I initially balked at the idea of tacking on more principle, we have come to some conclusions about our ability and desire to move, as well as our long term retirement investment strategy. The facts are: 1) To rent in the area we want to move to, we would end up paying as much as the new mortgage payment including property tax and insurance. That's before we spend a nickle on renters insurance and account the for tax deduction advantage. While true that we could rent a comparable home in the same area as our present home for less overall, that tradeoff just isn't worth it to us. 2) We already have experience as landlords, and while in those terms the present house is not a great investment, it stands to add value to our portfolio eventually. We will just need to hold it longer is all that boils down to. 3) While we have concurrently also decided to file Chapter 7 bankruptcy, reaffirming the modification as well as our current auto loan should help considerably in rebuilding our personal credit. As such, we have agreed to the terms offered over the phone and should have signed docs by the end of the week with our first payment rolling out at the first of the month. We don't intend to work any monkey business with the mod during our BK procedings, but we were resolute to have something in hand either by way of foreclosure or modification before beginning that process. This way we know what Citimortgage will accept, and we know that we will be able to afford it moving forward. Best of all is that now I can finally truly justify fixing the hot tub and replacing the cover!

I agree...HOWEVER...I have this nagging sensation that there is going to be a definite industry reprisal to people walking from their homes. Number 1: Banks will almost certainly turn over deficiencies to collection agencies. Not right now, but as soon as the political climate is conducive for doing as much, you can bet they will. Number 2: Previous rules regarding mortgages post foreclosure/BK/etc. cannot be relied on. Like others have stated, the paradigm has changed. The whole last decade was Disneyland. The way I see it, BK7 is the only way out for many people. They don't want to accept this, but it is how it is. The sooner people come to terms with it all, the better because I wouldn't be surprised at all if we see even more BK legislation coming down the pipeline. The Prophet! I bow before your knowledge! http://www.huffingtonpost.com/2010/06/23/f...t_n_623562.html

I think the confusion is over the issue of contract. IF the debt is NOT reaffirmed and IS discharged, that releases both parties from the mortgage contract. Whether both parties agree to start from the original contract as terms for modification however is up to them and is essentially a new agreement in that frame. I.e., the original agreement is nullified by the Ch 7, so there is no existing note to modify, but rather a starting point for going forward with the new terms even if they are a modification of the old terms. Both parties can still walk away without being subject to recourse from the other. The process of eviction and foreclosure for the lender then becomes a simple formality should they choose to exercise it, with no right of remedy extended to the foreclosee. In other words, so long as the bank continues to accept payments and not file for foreclosure, it IS rent - unless NEW terms are agreed to, wherein the bank may allow application of prior uncontracted payments to the balance of the note. But they don't have to do that, nor do they have to accept payments, nor do they have to abstain from foreclosure. Perhaps as I mentioned before, I missed something in the circumstances here, but the words being used regarding the mortgage are 'discharged' and 'modify'. With respect to chapter 7, that simply does not make sense. I understand if that is the term lenders are using to rope people back into a mortgage, but as I understand it, people should know that neither they nor the lender are obligated to do anything, and the mortgagees right to occupy the property is at will of the lender who has full right to reposess the property as security on the default. Continuing to make payments therefore is no guarantee of a new agreement from the lender, but rather a show of good faith that the lender may ultimately choose to ignore. I am NOT saying don't make the payments however, but merely suggesting that such payments without contract are not likely regarded as 'consideration' beyond granting one the right to occupy the property - so long as the bank continues to accept them.

Ok, so if I understand what you are saying, it is basically an 'at will' agreement that both parties can either choose to modify or walk away from. I'm not so sure that the lender cannot pursue later however if the modification is agreed to post discharge. My understanding is that it becomes a completely new agreement enforceable via foreclosure, and as such, eligible for pursuit of deficiency in some states. But I'm not an attorney and for practical purposes this could just be an argument of semantics.

Perhaps I am misunderstanding something about your situation or the Ch 7 process, but from what you have stated, you don't have a mortgage to modify if it was discharged and you did not reaffirm. Perhaps they have agreed to accept payments as rent, but the only options I see are to continue renting from the bank - or get them to write a totally new loan. A modification by contrast is an agreement to change an existing mortgage.

Don't fear the foreclosure. I'm not sure why you are so concerned about this affecting your work, but one thing Citi will not be doing, unlike your other creditors, is calling anybody they can, including your employer, to get you to pay. Granted, in most places it will make the public record and be published in the newspaper, but you will be in good company there. If anything, it might be worth pre-emptively explaining to your boss that you have made a financial decision to bail out of a bad investment. Seriously, who is the smarter person with handling money, the one who keeps throwing good money after bad for a decade or more, or the one who is able to recognize a bad deal, cut bait, and get money ahead? We stopped paying in March of this year. 3 months later, not a single letter regarding our deliquency, though we were amused at the letter we received last month advising of our automatic rate adjustment. Funny people working there . . .

Sorry, I confused HAMP with the First Time Homebuyers Credit which is set to expire on closings after July 1. Same argument applies.

Yeah, but from the other side of the mailbox, there are no doubt countless borrowers like ourselves who have agreed to live up to a deal only to be left twisting in the wind. They apparently can't bother with a notice every few months saying that the modification trial period was being extended due to processing delays though. Even a computer generated form letter would do the trick there. I'm stickin' to my guns on this. There is something else going on. HAMP has ended (right?). New loans will begin to dry up quickly, and housing prices will resume their fall.

The trend I see from that report is that bigger the bank, the lower the permanent mod to active trial ratio. In other words, they are setting more people up on a plan than they are actually modding. I have to wonder what figure Citi stuffed us into on that table. Up through February we were actively paying on our trial, but if it was truly a trial, why no communication with us in the last 6 months? Bottom line: I think the big banks are sitting on allot of paper that turns into losses before ink dries, and they don't want to report it in their SEC filings until they have thoroughly filched us for as much in the way of executive bonuses as they can get. When they run out of rope on that, the stuff will hit the fan on both their earnings and the stock market in general, leading to our second major drop in the market - most likely within the next two years. This mess has barely just begun to reveal itself.

Well Citimortgage finally sent us something; a notice that the rate on our original note is going up! Yep, we'll get right on that. It gave us a brief chuckle.

As a Citimortgage Trial Modee, here's my take on it: In short, they are totally FUBAR right now. While there are schemes out there for lenders to work the numbers on their losses and reclaim credits through some tax deal with the Federal Government, the fact is, I believe we the people still own a piece of Citimortgage through the TARP funding (or whichever stimulus/rescue package it was). This leaves them in the position of having to cut their losses whichever way they can because the government cannot bail itself out with a tax credit/deduction. I.e., if they foreclose, they take a loss with limited ability to leverage it for gain. If they permanently modify the loan however, they are still stuck with having to write down a loss. Bit if you keep making the payments, it remains a source of revenue, and even if you don't keep making the payments, they are still able to claim the debt as future income due. In other words, until the government is completely clear of Citimortgage's operations, they aren't doing much of anything. They may let you stay longer if you pay, but I believe they may let you stay just as long if you don't! Either way, by allowing you to remain in the house, they have a tenant that has at least some interest in maintaining it and avoid the perils that often go along with abandoned properties. We stopped paying our mortgage April of last year. Our trial mod started in July. We have never seen any paperwork to confirm or deny a permanent mod and have again stopped making payments as of March. 40 days later, not even a phone call. For whatever that's worth . . .

Yes, expect to be asked to make a payment with relatively little notice. Most likely they will want to include insurance and tax as impounds to the modification payment. Keep paying insurance until they tell you not to, otherwise you may have a lapse in coverage of your belongings.

I think you have to take a serious look at what your long term goals are and what you stand to gain by staying in the home. My wife and I have determined that even after adjusting for tax deductions, we stand to save $400/month by foreclosure. The lack of equity in our present home makes this a relative no-brainer in my opinion since we will actually be afforded the ability to move closer to our childrens' schools. Check your local rents!