Home Loans and Support

Filed Chapter 13 and need a loan mod

Discussion in 'Stop Foreclosure and Tell Us Your Story' started by gabrielcv, Jul 22, 2008.

  1. gabrielcv

    gabrielcv LoanSafe Member

    In 2002, my husband and I started a business after both of us were laid off from our jobs. For five years we struggled trying to get the business off the ground, and finally called it quits in the summer of 2007. In that time, we racked up a ton of debt on both credit cards ($150K) and mortgage refinances. We were using credit cards and HELOCS to fund the business and subsidize our living expenses.

    I tried back in January of 2007 to refinance our first mortgage ($384K) and
    our second HELOC ($114K) into one more affordable loan. The housing market and credit crunch had just begun it's slide at the time and I wasn't able to get my home to appraise high enough for an allowable loan to value ratio, and my then credit score of 691 was no longer good enough.
    Needless to say, we got stuck with it. Our payments climbed, and our
    credit dried availability dried up. We fell behind and in Fall 2007.
    We were offered a loan modification on our first mortgage with Litton Loan in November of 2007 via Titanium Solutions with a new interest of 8% and the arrears added to the loan balance, and made a good faith payment of $2900. I accepted it with optimism as my husband had started a new job that summer and I had just accepted a job offer that month to start in December. Despite the new jobs, we still couldn't afford the credit card payments (stopped paying them) and could barely afford the mortgage.

    I lost my job in February after just 3 months, and our home went in to
    foreclosure. I am currently emplyed only part-time and continue to look for a full-time job.

    Our home was set for sale on June 26th.

    We filed for Chapter 13 Bankruptcy on June 24th and that has stopped the sale of our house for now as we work through everything.

    Although the Chapter 13 payment plan can bring us current on our mortgage via a court designated payment plan to pay the arrears, our mortgages are still pretty steep and we cannot afford them as is,
    $2900/month at 8% on $394K with Litton Loan and a HELOC of $800/month at 11% on $114K. Our house has an approx. market value of
    $365K currently. I had heard and read about alot of mortgage companies
    forgiving portions of principle balances to allow for an affordable payment.
    I sought help from a company that attempts loan modifications on your behalf with the lenders. They weren't able to help me since I was now more than 3months behind and because I have filed for bankruptcy.

    We chose Chapter 13 vs. Chapter 7 as we really want to try to keep the house. I am planning to do a QWR as you suggested but I really don't know if the lender did anything wrong during the loan process. Our mortgage was acquired through New Century Mortgage Corp. in Irvine
    (now defunct). Can I request a QWR for review purposes anyway?

    I hope I didn't ramble to the pint of confusing everyone. Please help!
    I don't even know how to begin.
  2. Moe

    Moe Call 1-800-779-4547 Staff Member Loan Safe Mortgage

    Hi gabrielcv,

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

    For a Chapter 13 BK you would need to contact the lender to get started for the modification and most require permission from the trustee...........the process however is the same for qualifying...............

    But you might need to have the attorney call them on your behalf because your file will be coded BK and will be in that dept.

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