Succesful Modification

[sh1974]

I have just finalized a loan Modification on my 1st Mortgage through CCO Mortgage (Charter One). I was given a Modification on my 2nd mortgage through the same company 5 months ago for 2% for 5 years from 9.75. I have no idea why they took so long to approve me on my 1st mortgage since it was the same company. Also what they are given me on my 1st is not the Gov Hamp program it is in house modification which is:

2% 1st year
3% 2nd year
5% for the remainder of 40 years

They are also making me impound my account which I guess isn't so bad.

My old rate was 6.25% for 30 years, I am not to thrilled with what they have offered me but with the 2nd mod at least it gets me through with a nice payment break for the first 2 years and it is a good rate for the remainder, just not that happy to have an additional 10 years to pay.

The reason I am taking it is I was laid off and already started to collect unemployment and I do not want to chance being turned down later on if they found out I don't have my job any longer, though thank God my wife has a good job.

My question to anyone who can answer or help me is that now that I have signed the docs on the 1st Mortgage and once I have made a few payments can the lender cancel this modification if I make all the payments? What I am worried about is that I am going to be filing Chapter 13 BK and try to strip my 2nd mortgage off which is for 160k but has already been modified. It isn't the end of the world if I can't strip the loan if I can't get the value I need for appraisal since I can afford the new modified payments. I am going to file BK regardless since I have not made my credit card payments for over 6 months and can't catch up now with the late fees and over limit fees and ruined credit. So if I can strip the loan I will most likely piss off my lender that has been nice enough to modify my loans, they would lose 160k. If I can't strip the loan I will just file Ch 7 BK to get rid of credit cards. If anyone has any knowledge of what I should do or what will happen when I file the Ch 13 BK I would greatly appreciate the advice. I wish everyone luck that is trying to go through a modification, it was not easy but it is possible!

[Sunbeam]

If you have a final modification offer which you have signed and is now agreed upon by all parties then it is binding. Unlike the credit card companies, the mortgage companies cannot change your terms on a whim because you failed to meet obligations to other lenders. (isn't it weird that credit card companies can do this and do?) If you can afford your mortgage payments, then I would suggest you make them. If you get your credit card debt erased through BK, then you are okay. But if you just let your credit card debt ride and don't pay it without legal backing, they could get a judgement against you. Why would you strip your 2nd mortgage if you can afford to pay it?

[MyHAMP]

Originally Posted by Sunbeam

Why would you strip your 2nd mortgage if you can afford to pay it?

Why not if you can get rid of a $160K-debt at once?

And to the OP: Mortgages are business and binding, legal agreements. Being "nice" or "bad" doesn't help or hurt..

[sh1974]

The reason I would include it in the BK is after the 5 year period of 2% it goes back up to 9% and the payment would be $1400 on a 2nd mortgage which who knows if I would be able to afford that payment in 5 years. I would hope things would have turned around but I would like to put my family in the best position I can for the future and to be able to survive this Great Recession. I am also nearly 175k upside down since I live in Southern California and this Lender is not doing any principle reductions. Thank you for your responses.

[MyHAMP]

Originally Posted by sh1974

The reason I would include it in the BK is after the 5 year period of 2% it goes back up to 9% and the payment would be $1400 on a 2nd mortgage which who knows if I would be able to afford that payment in 5 years. I would hope things would have turned around but I would like to put my family in the best position I can for the future and to be able to survive this Great Recession. I am also nearly 175k upside down since I live in Southern California and this Lender is not doing any principle reductions. Thank you for your responses.

In that case, NOT stripping the 2nd would almost be financially irresponsible. A BK is a serious decision and the negative "side-effects" will be there for quite a while. So why not taking full advantage of your RIGHTS?

[Sunbeam]

Originally Posted by sh1974

The reason I would include it in the BK is after the 5 year period of 2% it goes back up to 9% and the payment would be $1400 on a 2nd mortgage which who knows if I would be able to afford that payment in 5 years. I would hope things would have turned around but I would like to put my family in the best position I can for the future and to be able to survive this Great Recession. I am also nearly 175k upside down since I live in Southern California and this Lender is not doing any principle reductions. Thank you for your responses.

Okay, NOW I agree with My Hamp....you need to put that 2nd into BK. If it was fixed, well, another story, but keeping it now would just be extending your misery.

[davephx]

But the stripping only works in Chap 13.

The banker's lobbyists defeated the proposal in Congress to have the "cram down" in Chap 7

[BadBobMo]

Yes BK-13 make sure to read up all all things. I stated this many times be very careful when both loans are with the same lender. I did read a early post were they were told my a lawyer that you could strip 2nd when both loans are w/same lender. I also read a post
that stated to the home owner if they did not do as they were told on their 2nd that they would not mod their 1st. As you can see it's like the wild wild west "No-Law" in town!

[davephx]

Wait for the mod to be approved..hopefully.. on the 1st than Chap 13 to strip the 2nd