Refi and BKR Ch. 13 Discharged

[Bailey3017]

Good day, I wanted to ask for some advice on this, maybe someone out there can help. I did a search and couldn't find what I needed to know.

My lender is a POS to say the least, details are long and drawn out so I won't go there.

I need to find a place to Refinance my exisiting loan, I only want to refi what payoff is...no extra money.

The stick in the mud is that we (my husband and I) were in Ch. 13 BKR since Oct. of 2007...came across some money and paid the remainder off so it was discharged earlier this year.

I can't find anyone who will touch us with a 10 ft. pole until we are at least 2 yrs. discharged due to FHA regulations.

Anyway to get around that?

[2ndTimeAround]

need to find a place to Refinance my exisiting loan, I only want to refi what payoff is...no extra money.

Don't know all your details. You have three choices, 1st) you can wait it out for the 2yrs FHA requirement, 2) wait for till your score is high enough for a conforming loan, or 3) contact your lender about a loan modification.

See that you are looking for no cash out, in Tennessee expect to use 5% of your equity for closing costs. See your credit score is low, I suggest you check in to a loan mod to reduce your payment.

If you are in an adjustable - and if you have a rate above 7%, chances are you would be approved. If your interest rate is below 7%, then you need to show a hardship.

By law nobody can tell you to go late on your payment, it will effect your credit score. I have seen people paying on time with low interest rates, getting turned down for a loan modification. Why? they are not giving the lender a reason to modify the loan (the lender is getting paid). The modifications I'm seeing completed, are people 2 months to a year behind on payments.

Doing a loan modification can save you in closing costs, and $100's/$1000's over the life time of your loan. Unless you are buying a new home, or a new car, maybe you can afford a hit on your credit. Again I don't know all your details.

FYI - Tennessee is a Non Judicial State, meaning your lender can auction your home only after 4 to 6 months of no payment. Doing a modification is non judicial state you need to be really careful..

Good Luck

Edited December 28, 2009 by 2ndTimeAround

[fert]

Did you ever find someone to help you out on your refi? I have a friend in a simular situation. Let us know what you di, thanks!

[2ndTimeAround]

Did you ever find someone to help you out on your refi? I have a friend in a similar situation. Let us know what you di, thanks!

Fert - see you are i CA - which is a non recourse state. If your property is in CA, you need to get someone who if familiar with your states laws.

[Bailey3017]

Haven't done anything yet. I was trying to work up my credit score. Today it jumped up again after falling down. My husbands is up to almost 600 now but my name is the only one on the home loan.

Anyhow, our intrest rate is over 7% right now and we are in an ARM. I am going to contact GMAC (against my better judgment) and see about doing a modification. It's my only option to try and rid myself of the 1100.00 a month mort payments.

I will let you guys know. Once I get my credit score up to 620 and get GMAC to actually update my credit reports with history then I can refi with Wells Fargo...but by that time I may be out of the BKR13 for the two years and be able to refi with my credit union.

That is probably what I will do since I am now close to one year out of the BKR 13 just do a mod (if possible) and then refi with my CU next year.

[2ndTimeAround]

.... I am going to contact GMAC (against my better judgment) and see about doing a modification. It's my only option to try and rid myself of the 1100.00 a month mort payments.....

Interest rate is over 7% right now and in an ARM. Not late on the loan, chances are they will make this a fixed rate. If you are thinking about trying to get a lower payment, you are not showing a hardship.

.

[Bailey3017]

I requested the mod from GMAC and they sent me mod paperwork that was basically a slap in the face. 975.00 mo. is what they lowered my payment to...granted it is lower than what I am paying presently (1004.00 mo) a whopping 30.00 is not going to make or break us financially.

I am going to send the paperwork back to them and call to let them know this is not acceptable and will not work, they need to do something better than this.

We will see how it goes, I am pretty sure I can get them to go lower and fix my rate if I am persistant enough.

We are late on the payments as my husband was out of work for almost two months. He is back working now and has a pretty good job but not good enough to keep us up on 1004.00 a month mtg payments.

I've also been fighting with GMAC to update my credit report...they've been reporting 120 days late since my Ch. 13 and all kinds of craziness! So stressful!!!!

[2ndTimeAround]

Bailey

Again I don't know all your details -

Anybody applying directly to their lender for a modification, what you call a slap in the face is normal. Understand your lender is not required to give you a loan modification. By sending in your paperwork, you need to show default is imminent unless they help you.

If you just send in the paperwork and wait for them to get back to you. It is like a game of Fish, you get what the dealer (your lender) gives you.

By sending in your paperwork, make sure your mortgage payment is over 31% of your gross income. Also put your thumb on the scale for your household expenses (don't short yourself). keep your expenses between $500 to $900 over your income.

If you have too many expenses, you are proving to the lender your mortgage is not the cause of your hardship.

Also - I am sure you are probably upside down to the value vs what you owe. On the application - don't show you have any equity.

Filling out your paperwork so that it benefits you is only half the battle. You need to work directly to the department managers and/or your lenders attorney, and follow a pre-scheduled mitigation plan. You have to negotiate your loan, so you get the lowest payment.

It costs on average to a lender $60k plus to foreclose on a home. By showing there is a benefit to keeping you in the home, you are showing cause to lower your payments.

As for making payments on time vs going late.

Here's two cases with the same lender, jumbo loans, both in Option Arms (Pick a Pay Loans) . One difference - one lady kept up her minimum payment, the other stopped her payments.

(Mentioned on another post) a lady in New Jersey after nine months of trying to get a mod done, her lender has placed a hard stop on the file because she is not showing a hardship. By her making her payments on time, her lender refuses to help her. For the other client located in Connecticut, she went late on her loan and received a $1000 less a month payment, her interest rate was fixed at 2.39% for the life of the loan.

To be able to get a better modification, no one can tell you to go late on your payments. It will lower your credit score. The choice is yours.

See you in Tennessee, which is a non-Judaical Sate, meaning your lender can possible foreclose on you in as little as four months of missed payments If you do go late, be careful.

Lastly on your credit report - right now your credit is not a priority!!! Your home is!!! In this order - You family and Health, Your Mortgage, Your Debts, ............ then your credit.

Due to the fact you did go late on your mortgage, the lateness's can and will probably be reported on your Credit Report.

It is going to take a few years of on time payments before you will be back in the upper 600's / low 700's. Then you can update your credit report - you need to start with the individual credit agencies. Transunion / Experian / Equifax - writing a letter requesting them to up date your payment history.

If the fact is you made and your lender accepted your payments and still reported you as rolling lates. You need to request a letter for them saying they were are fault. Then you send it into the C/B's with an explanation letter. This way is faster to update your report yourself.

G.L.

.

Edited June 17, 2010 by 2ndTimeAround

[LUEser]

They actually don't even have to give you four months, though that's the average quick time frame here. All they have to do is send you a notice of default and intent to accelerate. Give you the specified amount of time required by state law and the note to cure the deficiency, and then it's off to trustee sale land.

However, the bigger lenders are swamped right now. The lady and I are on 14 months now with no payment having been made. Generally just being pains in the a$$.

ITS letters, QWRs, FOIA requests, TILA disputes, FCRA disputes, FDCPA disputes. But everyone's situation is different. GMAC may foreclose much faster than BoA. Appraisal fraud and breach of fiduciary duty, breach of contract and rate jacking claims brewing too. They don't like me very much right now, but we've been in continual modification for about 12 of those 14 months, each time, taking 4 months to be told the "investor didn't approve" and then getting kicked right back in the program.

Right now I'm content keeping up the dance. 8 more months and it'll be 2 years rent free. Eventually they're going to come to the table and talk about getting this thing fixed. But until then, it's time to tango.

If nothing else Bailey, I recommend the QWR, and during the QWR period, do an FCRA dispute, since they're not supposed to report anything negative during the QWR period. If they do, you get RESPA and FCRA causes of action. And even though RESPA and FCRA claims won't pay for your house, they're fun to throw around. The real kicker is Section 3 of TN's UCC and the issue of presentment. Do a search for David Mills from Shelby County. He's arguing his case on appeals regarding the presentment issue and holder in due course arguments.

I also recommend finding out who the lender is, who the investor(s) are/is, and who the servicer is. They may not be who you think they are, especially if MERS got it's paws on this mortgage.

[2ndTimeAround]

Wow 14 months no mortgage payment - since Tennessee is a non Judicial state - going late after 4 months, a lender could start the foreclosure process. Just spoke to someone in Georgia (non judicial state) lost their home in six months.

There are so many factors - The time to foreclose is different with each situation. Being in a Non Judaical state, the lender is not required to go through the court system. Where Judicial states, the foreclosure is more structured and has to go through the courts. The time is different in each case.

Have client in Amityville NY was 17 months down, completed his mod a few weeks ago. One of the best mods I have seen, they are extremely happy with us. Received 2.39% fixed for the life of the loan, with all the arrears on the back end of the loan.

Last year heard a lady in Florida was coming out of bankruptcy - 60 months didn't pay her mortgage - decided she wants to keep her home.

Just took in a referral this morning from Brooklyn - guy attempted to do his own mod with BoA. They lower his payment for six months, he just received a letter in the mail asking for $18k in arrears to be paid next month. He was four months down starting before his mod. They lowered his payments $600, which he made on time payments. In the eyes of BoA, the helped him for six months, now his lender is looking to get their money back.

People need to understand - your lender is not looking to do you any favors. By putting someone in the making home affordable problem, the lenders appear to be helping out. What they are not telling you is how big of a rebate they are getting in return. Most people are denied for the MHAP.

So one a person is turned down for this program and they think they are done. All they need to do is reapply for a conventional loan modification.

LUEser - you day is coming, 14 months of no mortgage payment is not something to brag about.....

My question to you is what are your plans next year, five years, do you have a plan for the rest of your live? Short term, Long term goals?

Good Luck

.

[LUEser]

There is definitely a long term goal in mind. Quiet title would be a first. The securitization chain hasn't been attacked and dragged through the judicial mud here in TN yet. I want to help it get there. If it fails, there's always BK to fall back on, which is what Ms. LUE was planning from the beginning.

[liverichly]

This is a pretty old thread I see, but recently was responded to.

When it comes to a Ch 13 BK, FHA just requires that at least 1 year of on time payments have elapsed and you have the trustee's permission to refinance. However in Bailey's situation the BK has already been discharged, and going by the time line references and when the original post was made, it certainly looks like 12 months of payments were made and my guess is that they were all made on time.

At this point Bailey would be eligible to refinance their mortgage into an FHA mortgage assuming they qualify otherwise (debt ratio, credit scores, equity).

The only issue that I see is that the mortgage is reporting 120 days late, did that get taken care of? Was the mortgage actually late at all, or were the payments maintained in full and on schedule? If it was late, and went 120 days late, then that is considered the same severity as a foreclosure. Fannie Mae JUST released guidelines that one needs to wait 7 years after a foreclosure (or having mortgage lates the same severity as a foreclosure) in order to obtain new financing from them, Fannie Mae just offers conforming loans though, they have zero to do with FHA mortgages. FHA requires 3 years from a foreclosure/mortgage lates of the same severity though. So it Bailey's situation really sounds like it's going to boil down to their mortgage payment history.

[1time2many]

"We are late on the payments as my husband was out of work for almost two months. He is back working now and has a pretty good job but not good enough to keep us up on 1004.00 a month mtg payments."

I think this will be a refi killer even if they would qualify beyond the 13.