What happens after a loan modification has been denied?

I was 6 months behind on my mortgage when I got pre-qualified for HAMP. I paid the modified payments for the 3 month trial period, on time. I filed Chapter 7 and had to modification process start all over again.

I would like to be prepared so I am asking if anyone had their modification denied, what happened next?

Will I have to come up with the entire 7 months past due ($21000+)? Or has/will the bank apply the past due to the end of the loan and allow me to continue to make the original payments?

I hope that this makes sense...

It's more difficult to get a modification while in bankruptcy. Many lenders don't offer mods, unless the stay is lifted or the bankruptcy is dismissed or discharged. The lender has to get approval from the court to do a mod. It's so different from lender to lender, so it's hard to say. I have not heard of any lenders do a trial mod during bankruptcy, but HAMP guidelines do allow it. There are a few lenders/servicers that do loan modifications without the 3 month trial for people in bankruptcy.

Who is your servicer?
Who is your lender?

My servicer/lender is Chase. I actually received the home modification paperwork today (although I faxed them the necessary docs last week).

My bk has yet to be dismissed. In fact, Chase filed a motion to lift the stay which will be heard on October 15. I had my attorney file an answer just in case I am denied the modification and they are using the HAMP guidelines as a reason to dismiss. I did this so that I will have more time to come up with the cash.

You are correct. I had the original modification trial period and then filed BK. Now I have to go through this again. I hope that they give me another 3 months with the reduced payments. By then, if required, I will have the cash if I am denied.

I just want to know what those that got denied had to do in order to keep their homes.

Does the court know about the loan modification?

If your lawyer is good and the judge is borrower friendly, your attorney could try to get a cramdown(court ordered oan modification) if you get denied for a loan modification.

I believe the HAMP program only allows you one shot so I am not sure you get a second chance after BK but I could be wrong.

Ok, it is official. I am DENIED!!

They said the reason why I was denied is due to insufficient income (duh, that is why I need the modification).

So, I have just submitted an application with NACA and will be attending a workshop (300 miles away !) in two weeks.

NACA is my last hope.

Does anyone have any additional ideas/resources?

I spoke to my BK attorney and she told me that Congress blocked the ability for BK judges to cram down a modification. She also mentioned that cram downs are only available for a Chapter 13. I filed a Chapter 7.

Try a repayment plan, deed-in-lieu, short sale, and worse.. foreclosure. Stay away from that though. It'll keep you around tax time.

Have you had the meeting yet to lift the stay? I know you said Oct 15, but was it continued?