Loan Modification w/Litton SUCCESS!!

[Ayudeme]

A few months after moving into my new home, there was a significant reduction in my income. I saw the writing on the wall and not only immediately contacted a bankruptcy attorney, but also picked up a part time gig. I have never missed a payment on my mortgage, however, can't say the same for my credit cards. I also depleted my retirement funds. The inevitable is here and the bankruptcy will be filed soon. Today, I contacted my lenders on my first and second and informed both that I would be filing bankruptcy - I also inquired as to the process of a loan modification. Litton indicated I needed to submit the following documentation:

1. Hardship letter;
Financial worksheet, which includes:
2. One month paycheck stubs;
3. A list of all bills;
4. 2007 tax returns; and,
5. One month of bank statements.

Specialized holds my second, however, "Amy" took down my attorney's info because the bankruptcy department was closed.

Any advice?

[Moe Bedard]

Hi Ayudeme,
welcome to the forum, thank you for joining us....
Are you filing Chapter 13 or Chapter 7 BK?
Will a loan modification help you in your situation?
What state are you in?
What is the current interest rate?
Is it an arm? Did it adjust yet?
What is you loan amount on first and second?
any information you could give would help.....
Thank you

Welcome and thank you for joining the forum....

I am not an attorney.....

With a bankruptcy once you have filed it, the modification process is not possible, therefore you must do the modification prior to the BK or plan on waiting until it is discharged.

It used to be that it was something that the BK attorney and courts could assist with in a Chapter 13, in fact the courts could compel it, now with Chptr 13 the lenders will not proceed with the modification while you are in the Chptr 13, the courts are in charge of your financial life, and they can not alter anything in your financial life without court permission and choose not to, it was made very difficult with the new bankruptcy rules. The courts can not longer compel the modification or reduction of interest rate or payments. So..if you are planning on a Chptr 13 the modification must be done prior to filing. All of the new Bankruptcy rules have caused that little glitch on primary residences.

The problem that you may run into is that you may have to much debt to allow the modification to go through prior to the Chptr 13 as you may be considered to be upside down relative to your income due to the debt load.

With a Chptr 7 and a large amount of debt....then the chances of modification prior the Chptr 7 are again very difficult as again you may not qualify due to your income and expense issues being upside down. After the Chptr 7 then it is not as hard as the consumer debts are discharged and the debt does not weigh down the income, giving you some relief so that you may qualify for the modification.

Please consult with a Bankruptcy Attorney on all decisions regarding Bankruptcy. Just realize that once the BK is filed and until it is discharged you can not achieve modification. Once they are under notice that you are even considering Bankruptcy the lenders will have their guard up in order to protect their position, but as long as you have not filed, they are still able to consider and grant modification.

The second may or may not modify, it is not common for seconds to modify very often.

Litton is tough to modify with...slow and very non-communicative, not real upfront and leave the others on the forum thinking that they are not entirely truthful. If you proceed with the modification before BK be very proactive, determined and focused.

Here are some numbers and access names with e-mails, etc....

Litton Loan Servicing
4828 Loop Central Dr.
Houston, TX 77081
USA -
713-960-9676 (Phone)
713-966-8830 (Fax)

Larry B. Litton Sr. President and CEO

Larry B. Litton Jr. COO

[Ayudeme]

Oh my -

Good evening all and thanks much for the immediate reply! I am in the state of California, and when I spoke with the bankruptcy attorney today, we will be filing a Chapter 7. Initially I was going to wait until the discharge to contact Litton, however, I thought perhaps alert each lender so that they do not "freak out." My current interest rate is at 7/25% and is due to adjust March 1, 2009.
The loan amount on the first is 277,331 and 93,000 on the second.

[weroper]

I didn't think it was possible to file Chapter 7 and still keep your house???

Yep you can keep your home in a BK, however you have to be current when you go in, and pull the property through the BK by reaffirming the mortgage loans, and during the time that it is in the courts, do not miss a payment ever...

I am not a Bankruptcy attorney, but that is kind of how you do it....however if you are delinquent going into the Chapter 7 they will take the house by asking the courts for a relief of stay and then proceed with the foreclosure. So it is tricky and very risky, if you are contemplating BK please contact a good solid, honest Bankruptcy attorney that will guide you through that decision.

There are some really good Bankruptcy attorneys out there and then there are those that aren't so good, make sure you interview them and decide on the one that will take the time to explain the ramifications of BK and the whole process. They work for you they are your employees you hire them for the service.

[Ayudeme]

I will post updates as I proceed along. Thanks much for all the advice.

[Moe Bedard]

You are welcome.......
Keep us posted as you go along...
Best of Luck to you.....

[Ayudeme]

Will do, and again, thanks much.

[Ayudeme]

Hello All -

I have a question - how can one go about finding out which lender holds the deed on my condo? Ownit Mortgage Solutions, my lender, is no longer in business and filed bankruptcy in 2007. Oh goodness, please don't say offshore!

The only way that you can do that is potentially ask Litton...they may know or may not know. The Deed of Trust was assigned before the ink was dry after you signed it....

It was then sliced and diced and sold to any number of investors, the tip of the iceberg will be the one that Litton tells you about, that is the trust that it assigned to. After that lots of folks own the Deed of Trust, and honestly, off shore is not far from the truth.....

Maybe part owned by the State of New Mexico they bought a whole bunch of this stuff, so did a lot of states...all over the place, sorry to say. If Litton will not tell you I can tell you that MERS/MIN will not work, you were not in a MERS/MIN lender shop....so the next best thing to do is send the QWR with the request for everything including all of the assignments of the Deed of Trust. The trust that owns this could be Deutsche Bank, Merrill Lynch, Morgan Stanley, Bear Sterns, Goldman Sachs, Credit Suisse, etc....

[Ayudeme]

Poppy -

I will give Litton a call in the morning.

Thanks.

Yes call Litton, but knowing who the investor is does not really make any difference in the modification process, the investor does really not even know that you exist. Their representative is Litton the loan is in a trust, glued together with 100's to 1000's of other loans like yours. The investor looks at the modification as a number attached to a trust with an anticipated yield and determines that the modification will work purely on whether the modification will impact the yield of income that is anticipated in that portion of the trust.....

Unless you are actually in foreclosure and in a state where the Judges have figured out that these investors may not be able to prove ownership the investor issue is kind of moot. It does tell us that there are some that will modify, but again that is dependant on the trust and the yield of that trust that the loan is actually parked in.

[Ayudeme]

An update - I received a call from a Litton representative indicating my loan modification has been approved. I must now await the paperwork. The rate was frozen for two years at 7.25%.

[Moe Bedard]

That is good..........please let us know when you receive you docs and if you have any questions regarding them.........

[Ayudeme]

*** -

Will do - at this point I remain on pins and needles.

[Ayudeme]

Does RESPA apply if one is in the middle of bankruptcy?

[Moe Bedard]

In what way were you thinking?

[Ayudeme]

I wanted to wait and make the modified payment before posting; BUT, I am a loan modification success story - approved! I read and leaned from every post. Moe, ***, and loansafe.org is the best!!

[Moe Bedard]

Ayudeme,


Congratulations!!
That is Awesome News!!!

[schwefls]

Ayudeme:

Congratulation, to you, party hardy you deserve it

[Abbykatesmom]

Congrats to you! Wonderful news

[12345]

holy crap, i emailed litton and got a response in less than a half hour! i am going to try this loan mod on my own. any suggestions on the financial Questionnaire? they don;t ask about electric and gas etc...

[12345]

oh forget it, they do ask. i am in a frenzy that they actually resonded to me

[Abbykatesmom]

Good Luck 12345. Mine took about 6 weeks with Litton!