I have been doing a home modification with Chase since August. They have all of the necessary paperwork and I have made the August and September payments on time and was ready to make the October payment. I called Chase two days ago and they said that the modification process is going as planned.

I just attended my 341 hearing today with no issues. However, I received an email from my attorney today stating that Chase's attorney has:

1) Filed a petition to remove the stay on foreclosure (I am 5 months behind on my payments before the modification process)
2) They are returning my September payment and want the full amount

The reason why I filed Chapter 7 is so that I can make sure that I have more money going towards my mortgage.

Has anyone successfully filed Chapter 7 and did a successful loan modification?

Any words of wisdom?

I've been told that you cannot doe loan mod once you file bk7. My friend tried this and was turned down every time. Her house is set to auction at the end of October and they act like she can re affirm her house through a loan mod. Frankly, I think the lender is blowing smoke and wants to keep her from doing anything else. I don't know though........

IMO you are going to have to find a way to bring that mortgage current. The problem is, the automatic stay prevents the lender from doing very much, it's a blurred line between offering you a voluntary catch-up plan, and violating the ban on asking you for payments.
Once the stay is lifted they can speak with you again, but if they insist on the full amount upfront- your choices are either to pay it, or let house go.

If you discharge the mortgage, be careful about "modifications" after the fact. You could conceivably put yourself back on the hook for the debt again by voluntarily agreeing to repay the loan under whatever the new terms might be.

I'm glad that I wasn't wrong. This is what I was told too. My friend is talking to the first mortgage AND the second mortgage co. They are talking to her. I told her today to be careful!!!! If you reaffirm(sp), then she's back on the hook.

But her loan is a unique animal. It involves fraud on the lender's part. I just hope that she can come to terms with this. It bothered her sooooooooooo much that she had a heart attack. I posted about this months ago.

We talked about whether it was worth the stress or not. If you cannot deal with the stress of the situation, just let it go. It's just material possessions and those come and go, ya know? One can always buy another house down the road.

I remember when I lost my house. I cried...slinging snot cried. It was aweful. That was a few years ago. I ordered socks for my girls' cheer team for Cheer for a Cure back in March and Paypal (don't even get me started ) kept referring back to my old address even though I had updated it numerous times. -The adress for the house that I lost. They shipped the socks for the whole cheer team to my old house. Talk about embarrassing. The bank branch manager in the next town bought my house. We knew each other. But her family was really nice and held my socks for the team and I got them.

But my point is that when I went back to the house ( I hadn't even driven by it after I moved out), walked up to the door etc., it really hit me. It was just a house. A material possession. I had my family and my health. That's what truly matters.

And that's the most important thing. Your family. It doesn't really matter where you live, your still a family.

If your house is something that you are willing to fight for? Great. But you must be able to accept the bad with the good and realize that you may not win. If you cannot deal with the stress then IMHO, I'd let it go. You are already off the hook with the BK.

Renting isn't so bad. Just think...when something breaks, you can call the landlord and they'll foot the bill. Just trying to be lighthearted........
Just to say that I'm no expert. When I lost my house there weren't any loan modification deals or anything floating around. But let's face it. Few are getting these loan mod's anyways. It's kind of a sick joke.

How many success stories have you read?

Hmm, not sure if this is correct.

I found this information (Announcement 09-05R - Home Affordable Modification Program faqs) which states:

Q13.
If the borrower files for bankruptcy protection during the Trial Period, is the Trial Period Plan canceled automatically or is a servicer required to continue to work with the borrower?

Borrowers who file bankruptcy during the trial period, but who make all of the required payments in a timely fashion and are otherwise in compliance with the Trial Period Plan remain eligible for a modification provided all of the representations in section 1 of the trial plan remain true. The servicer and its bankruptcy counsel must work with the borrower and the borrower's bankruptcy counsel to obtain any required court approvals of the modification. A borrower actively involved in a bankruptcy proceeding prior to being placed in the HAMP is eligible for the HAMP at the Servicer’s discretion. If a servicer provides an offer under the HAMP to a borrower that is involved in an active bankruptcy case, the servicer must work with the borrower or borrower’s counsel to obtain all necessary approvals from the bankruptcy court.

I sent this to my BK attorney and he said that I definitely have a strong case. He is filing an answer against the stay motion next week.

I hope that this will buy me some more time.

Now my question is if stay is lifted, how long do I have? I have not paid my mortgage since February, they filed a notice of default in June. I had my 341 hearing in September and the lift of stay hearing is on October 15th.

Wow. Thank you so much for saying this. Brand new perspective!

Taz,

I came to the boards to relate our experiences and immediately stumbled on your question. Our case is a little different from the norm as you will see, but it can be done.

I am married, but filed a Chapter 7 without my wife in June just before the auction date.

About a month ago the lender requested and was granted relief from the stay and a new auction was set for late next week.

Last week I received a letter from the lender requesting updated financial information and asking that I call if we want to try to work something out.

When I called, I was granted a forbearance of 6 months with nothing required upfront and a payment of 50% of the contract amount.

The lender (Aurora) indicated that they would send out a form after two payments are received to work on a permanent modification which would be dealt with at the end of the forbearance in March.

Again, our situation is different as only one of us filed the Ch7, but it has been me that they are dealing with and they haven't even mentioned the BK in our discussions.

Good luck!

LGO

Thank you, thank you, thank you!! I am married yet the house is only in my name and I am the only one that filed Chapter 7!

When you say 50% of the contract amount is that the amount that you were past due?

No problem at all Taz.

50% refers to our monthly payment during the forbearance period... it is 50% of our contractual monthly payment under the original terms of the mortgage.

Prior to filing I tried to get Aurora to talk to me, but they kept telling me that if my net income at the end of the month was negative, there was nothing to discuss. This turned out to be wrong (see below) as a negative income is required to get a forbearance with payments less than the contratcual payment which we could no longer afford.

Last week, I was showing a positive income and the forbearance payments they were coming up with were greater than the payment under the original terms of the mortgage.

Then a nice lady gave me the formula they use and my attorney said many lenders use the same formula.

The formula is this:
The maximum reduction of the payment in forbearance can be 50% of the normal mortgage payment and that level reduction is hit when expenses are 125% of gross income, inclusive of the "normal" mortgage payment. As expenses go down from there, the payment goes up. In other words, if your expenses, including mortgage, are exactly 100% of your income your mortgage payment would stay the same.

My Ch7 schedule of expenses turned out to be exactly 125% of my income, so I provided those expenses to the lender and everything fell into place from there, though I knew they would given the formula above.

I just received the paperwork from Aurora yesterday and all is exactly as they explained with no surprises or concerns.

In two months we will need to provide them with everything necessary to complete a permanent modification, so now I need to figure out how they calculate that!

Good luck to you!!!

LGO