Chapter 7 Mortgage Issues HELP please!

[Redhd122677]

My husband and I filed chapter 7 back in 2005 and was discharged in 2005, we stayed in our house, which was included in the bankruptcy and not reaffirmed and continued to make voluntary payments. We divorced in '08 and I was awarded the house with the condition I refinance or sell within 2 years. Now here's the problem, one month in '08 the mortgage payment was late, and since then the mortgage company has been reporting it as late. They are also reporting to Experian, and Equifax that it is an open debt with $116K owed. Now I go to my Transunion report and it's reported correctly "Included in Bankruptcy" with $0 showing owed. No lates.

I understand from everything I have read on here that they can report anything they want prior to bankruptcy discharge, but after....can they report a late voluntary payment on a discharged, non-reaffirmed debt? I have been fighting with them back and forth to which apparently they want to negotiate now and tell me they will remove two, but none of the others, they have now blocked me from making online mortgage payments, and I just received a letter stating they are holding my last mortgage payment in "suspense".

Now all this being said, all I want to do is refinance this house, but even that is a grey area. What am I refinancing? Is the money still out there somewhere to be paid off, and they will release the deed at that point? I know I could walk away and not pay another dime, but it's my house which I love. I owe about $116K, and it was apprased last month (before all this mess started) for $150K, but now no lender will touch me, not because of the bankruptcy, but because of the late reporting. Do I have any recourse? Any help would be greatly appreciated.

[Methuss]

can they report a late voluntary payment on a discharged, non-reaffirmed debt?

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I just received a letter stating they are holding my last mortgage payment in "suspense".

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Now all this being said, all I want to do is refinance this house, but even that is a grey area. What am I refinancing? Is the money still out there somewhere to be paid off, and they will release the deed at that point? .....Do I have any recourse?

To answer the first question... No. They cannot report post BK lates on an un-reaffirmed mortgage. PERIOD. This is a violation of the permanent injunction and the FCRA. There is no debt, so you cannot be "late" paying it.

Item 2: Yes they are perfectly within their rights to hold a payment in suspense. Now let me explain that a bit more. Lets say you were late an a payment and you sent the minimum due. They can legally tack on a late fee. Because you rode through the bankruptcy and your payments are voluntary, that means you must satisfy the lien to stay out of foreclosure. That means you must pay everything current every month. If you are even one penny short of paying the full amount due (including late fees), they can hold the payment in a suspense account until you have given them enough to catch up -- to the penny.

Last item... You are not "refinancing" anything. A refinance means you had an obligation that you are converting. Since your bankruptcy wiped out the obligation you are in-fact applying for a new loan. Understand that you are under no obligation to do so. The county divorce court judge has no authority to override the FEDERAL bankruptcy court.

Find out what you have to do to get the payments under the lien back on track and do it.

If you want to apply for a new loan you can still do so and I would point you to the FHA because that is about the only place you will be able to get an approval with your loan to value ratio. But with your credit as it is, you would likely be paying a lot more in interest than the current lien.

[Redhd122677]

So before I started this post I disputed the information with Equifax stating the account was in bankruptcy. Today I received the results.

>>> We have researched the credit account. Account # - *42013338* The results are: This creditor has

verified to Equifax that the current status is being reported correctly. Additional information has been provided from

the original source regarding this item. If you have additional questions about this item please contact: Sun Trust

Mortgage

So basically my bankruptcy means nothing and Suntrust can do or report anything they want and Equifax just takes their word for it?

What do I do about this? Should I just accept this?

[Denita]

Methuss or Bingo or Ladynred or anyone else that knows - isn't the reporting by Sun Trust a violation of the discharge order?

Could the OP bring sanctions against Sun Trust for violating the discharge order?

[Methuss]

Methuss or Bingo or Ladynred or anyone else that knows - isn't the reporting by Sun Trust a violation of the discharge order?

Could the OP bring sanctions against Sun Trust for violating the discharge order?

Yes it is a violation of the discharge injunction...if in fact Sun Trust is verifying this and it isn't just Equifax labeling it verified without actually checking.

The next step is to write a letter to Sun Trust's general counsel asking what their legal theory is as to why they think they can continue to report a tradeline on an account that was discharged in bankruptcy and was not reaffirmed. Explain that Equifax has stated in a written notice that Sun Trust verified the accuracy of the reporting. Send it certified, return receipt and include in the letter that you expect a reply within 30 days.

Once you have determined the real culprit, be it Sun Trust or Equifax, you can then take the necessary legal steps to file an adversarial complaint with the bankruptcy court for sanctions.

BTW, I am working through a similar problem with Litton Loan, who took over servicing of a discharged mortgage account three months after the discharge and they have verified tradelines on my reports. This is a common problem with mortgage companies.

[Rick9972]

My husband and I filed chapter 7 back in 2005 and was discharged in 2005, we stayed in our house, which was included in the bankruptcy and not reaffirmed and continued to make voluntary payments.

I am sorry but I am very confused here. The loan was not reaffirmed, thus why has the bank not taken possession of the property?

Just what is this voluntary payment thing? Is that not just giving money away to the bank, because the bank will take possession sooner or later?

Thanks all.

[Methuss]

I am sorry but I am very confused here. The loan was not reaffirmed, thus why has the bank not taken possession of the property?

Just what is this voluntary payment thing? Is that not just giving money away to the bank, because the bank will take possession sooner or later?

Thanks all.

Read up a few posts. I explained how the lien survives the bankruptcy. As long as you perfect the lien (which includes not only the mortgage payments, but paying the taxes and insurance as well), the lender cannot foreclose even if your personal liability has been discharged.

[Rick9972]

Thanks

[falcon1]

I have a similar problem only mine is on a rental property which was discharged in Ch 7 back in Nov 08. I did not reaffirm the loan and I told them that I didn't want the property. The property was owned by Countrywide and 2 months ago they sold the loan to Ocwen. Ocwen started to contact me about the mortgage and I told them to stop since the loan was discharged. This was late Feb 09. They said that they would do so yet last month (Mar 20, 09) they reported to the credit bureaus that the loan is late. Are they in violation of the bankruptcy laws and what can I do about it? Three months after my bankruptcy in Nov 08, my credit score jumped from 540 up to 650 so I don't want anything like this to impact that.

[1time2many]

Start a paper trail ASAP.

[Denita]

I have a similar problem only mine is on a rental property which was discharged in Ch 7 back in Nov 08. I did not reaffirm the loan and I told them that I didn't want the property. The property was owned by Countrywide and 2 months ago they sold the loan to Ocwen. Ocwen started to contact me about the mortgage and I told them to stop since the loan was discharged. This was late Feb 09. They said that they would do so yet last month (Mar 20, 09) they reported to the credit bureaus that the loan is late. Are they in violation of the bankruptcy laws and what can I do about it? Three months after my bankruptcy in Nov 08, my credit score jumped from 540 up to 650 so I don't want anything like this to impact that.

Yes they are in volation just as Methuss states above - you should do the exact same process as the OP.

[falcon1]

Thanks. Should I contact my Bk lawyer?

[Denita]

He will probably want to send them ANOTHER notice before he goes after sanctions. Here's hoping that the lender has to pay YOU!

[Redhd122677]

Thanks everyone for all your advice. In reading some of the stickies and past posts I put together a letter to Suntrust and sent it certified mail, they received it on Tuesday. Now here's the interesting part, since receiving the letter I have been blocked from making payments online via their website, and the only decent person I have been speaking to at Suntrust in the bankruptcy department told me yesterday (Thursday), that I could no longer deal with her and would have to call my payments into their collections department.

There is some good news, it's gone off my Experian!! In 4 days!!! I disputed it Monday 3/30, and checked last night and it's already gone!!

However Equifax is playing a bit harder. I re-disputed it and called Equifax which they stated I would have to fax them copies of all the bankruptcy paperwork which I am preparing today.

I did find legal councel in NC that specializes in these types of issues (which apparently there aren't many attorney's in this field), I have an appointment Wednesday, however hopefully I won't have to go that route. I would much rather prefer to just get a new loan and call it a day, especially now that Suntrust has basically severed all communication. But with that Equifax looming, going to have to give it some more time. But again thank you very much!!