topic Re: Late on Mortgage Payments DURING Chapter 7 in Bankruptcy

Late on Mortgage Payments DURING Chapter 7

seemund — Thu, 03 Dec 2015 21:44:27 GMT

Hello,

I've applied for Chapter 7 a while ago, went to my 341 meeting and everything was fine. After the meeting I've noticed that my mortgage bank blocked my online access,so I could not make payments.

I also called the Mortage Bank but they won't tell me specifics on how much I owe/ have to pay (only a person that deals with bankruptcy can talk to me). They told me I was late for almost 3 months (October, November and December), however I just sent a payment 5 days ago, so I'm actually late for November and December (which isn't due yet until the 16th). Keep in mind this mostly happened because I wasn't receiving the paper statements to pay the bill.

I have a $500,000 exemption on the property, and I plan on keeping the house, but I've been reading online that they can try to foreclosure it, due to me being almost 2 payments late.

Please advise on what to do? Will I be ok as long as I pay the 2 mortgage payments and stay current by the time the bankruptcy ends, or will they try to foreclosure it anyways?

I don't see the point of them trying to take it from me, as my exemption covers well above the property price.

PS: House is estimated at $350K, my exemption = $500K, I still have a $170K loan on it.

Sorry if post was not clear enough, I'm actually losing sleep thinking that I could lose the house.

Edit: Discharge is scheduled to come out on mid January to beginning of February

Re: Late on Mortgage Payments DURING Chapter 7

Anonymous — Thu, 03 Dec 2015 22:02:37 GMT

@seemund wrote:
Hello,

I've applied for Chapter 7 a while ago, went to my 341 meeting and everything was fine. After the meeting I've noticed that my mortgage bank blocked my online access,so I could not make payments.

I also called the Mortage Bank but they won't tell me specifics on how much I owe/ have to pay (only a person that deals with bankruptcy can talk to me). They told me I was late for almost 3 months (October, November and December), however I just sent a payment 5 days ago, so I'm actually late for November and December (which isn't due yet until the 16th). Keep in mind this mostly happened because I wasn't receiving the paper statements to pay the bill.

I have a $500,000 exemption on the property, and I plan on keeping the house, but I've been reading online that they can try to foreclosure it, due to me being almost 2 payments late.

Please advise on what to do? Will I be ok as long as I pay the 2 mortgage payments and stay current by the time the bankruptcy ends, or will they try to foreclosure it anyways?
I don't see the point of them trying to take it from me, as my exemption covers well above the property price.

PS: House is estimated at $350K, my exemption = $500K, I still have a $170K loan on it.

Sorry if post was not clear enough, I'm actually losing sleep thinking that I could lose the house.

Edit: Discharge is scheduled to come out on mid January to beginning of February

Make your payments and you'll be fine.

They're not allowed to send you the bill or answer questions about what you owe while your discharge is pending, but they'll cash the checks if you send them

Re: Late on Mortgage Payments DURING Chapter 7

Anonymous — Thu, 03 Dec 2015 22:15:34 GMT

I would also consult with your attorney. They may be able to help get through to the mortgage company to help you get the payments to them. Good luck!

Re: Late on Mortgage Payments DURING Chapter 7

seemund — Thu, 03 Dec 2015 22:25:08 GMT

Thank you for the quick reply.

So just to confirm, as long as I send the payments and am current on the mortgage by the date of the BK discharge, I will NOT lose the house, correct? (0% chances)

Appreciate it...

Re: Late on Mortgage Payments DURING Chapter 7

skyblue — Sat, 05 Dec 2015 17:23:09 GMT

I don't know what your particular mortgage papers say, but when I fell behind on 2 months payments ( late was considered 15 days late after the due date), the mortgage company would only accept 2 payments at once. I was not permitted to only pay 1 months payment & then be caught up for that first month. Fortunately, the rep I spoke to at the mortgage company took the time to explain it to me in detail so I was able to fully understand the timelines.

Re: Late on Mortgage Payments DURING Chapter 7

StartingOver10 — Sun, 06 Dec 2015 03:32:29 GMT

You need to catch up now and pay everything that is due (for the house payment).

You are expected to make mortgage payments during the pendency of your Bk. You can't make them online and your attorrney should have warned you when you had your interview with him that the lender would not be able to bill you and that it is your responsiblity to contact the lender to make your payments on time.

You have to speak to the Bk department at your lender for any communication during your Bk. In fact, you can make the payments through that same department.

If you don't catch up, when the Bk is discharged they can start foreclosure proceedings against you. Right now you are covered by the automatic stay. Speak to your attorney. Just so you know, if you don't catch up, the lender can f/c even if your exemption is $500k. The exemption is there for you to protect your equity in the property, but it does not protect you when you fail to pay. Most knowledgeable attorneys explain that if you want to keep your house during a Bk, you have to be current at the time of filing AND stay current.

If you want to surrender the house, that is a different thing, then you don't have to make the payments and just let the lender f/c.

Re: Late on Mortgage Payments DURING Chapter 7

seemund — Fri, 01 Jan 2016 08:39:47 GMT

How "current" do I have to be?

I've catched up, don't owe any money, just this month's (January 1st, January 15 = grace day).

What happens if I pay January 22th for example? (It will be only 7 days "late", not even 30 days). Would that be bad and could trigger a foreclosure? From what I've heard you need to be at least 2-3 months behind for that to happen. I would think that being 7 days late (Paying on the 22th, instead of the 15th grace period) wouldn't affect it.

Please advise

Re: Late on Mortgage Payments DURING Chapter 7

DaveInAZ — Fri, 01 Jan 2016 13:44:20 GMT

@seemund wrote:
How "current" do I have to be?
I've catched up, don't owe any money, just this month's (January 1st, January 15 = grace day).

What happens if I pay January 22th for example? (It will be only 7 days "late", not even 30 days). Would that be bad and could trigger a foreclosure? From what I've heard you need to be at least 2-3 months behind for that to happen. I would think that being 7 days late (Paying on the 22th, instead of the 15th grace period) wouldn't affect it.

Please advise

With that much equity (you said: "house is estimated at $350K, I still have a $170K loan on it") why in the world would you risk being late??? I read through my mortgage papers before filing and it said that accepting payments after being late did not prevent them from taking action later, so during BK I went down to the post office and mailed them a money order for the payment every month. I was never late before filing, during BK, or since - I had/have equity, but not as much as you. And BTW, I'm coming up on 5 years post discharge Jan 31, and they still won't allow onliune access, still won't take money from my bank account with auto pay, I have to use my bank's bill pay to send the payment to them. The reason they blocked you access is because if they accept any money from you other than your voluntary, not requested payment can be consider an attempt to collect a debt under the protection of a federal court, a big no-no.

Re: Late on Mortgage Payments DURING Chapter 7

StartingOver10 — Fri, 01 Jan 2016 13:46:53 GMT

Are you sure you are caught up? I ask because when you are behind 3 months like you were during the Bk, the lender/servicer adds all kinds of fees - in addition to the late fee. If you only paid the standard payment, you may still be behind. Another trick they use is to put the funds you pay into a suspense account and not toward your actual outstanding debt. This is a problem for you if they do that. Contact your lender get accurate info. Have your attorney check too. I have seen lenders use the suspense account trick to hold funds especially when you have equity in the property. The more equity you have, the faster the lender can f/c (once you are discharged). Check right away so you don't end up in a bind.

Re: Late on Mortgage Payments DURING Chapter 7

despritfreya — Fri, 01 Jan 2016 14:44:58 GMT

Seemund,

You are worrying about nothing. You now know that, regardless of receiving a bill, you must make your payments on time and in the correct amount. That is a no-brainer and so is using the US Mail if you cannot pay "on-line".

Your payment is due on the 1st and is deemed late if not received by the 15th. After the 15th you have to pay a late fee. There are no other fees and you are not going to be charged for anything other than what your contract permits. If you make this months payment late you better include the late fee. In bringing the earlier payments current I sure hope you included each month's late fee. If you still do not have on-line access you may want to follow these simply instructions:

For US Mail delivery - Send Certified Mail, Return Receipt Requested

1. Write a check for the amount due, including late fee - if applicable;

2. Place on the check the Certified Mail Receipt Number (I put it at the top of the face of the check when I send my payment);

3. Take a copy of the check before placing in the envelope;

4. Mail Check - keep the receipt and, when the green card comes back staple both to the copy of the check;

5. When you get a bank statement showing the check was cashed take a copy of that bank statement and attach it to the copy of the check.

If you do this with each and every payment - each and every month - you will never, ever miss a payment again. I have been doing this for 14, count them, 14 years. I have never missed or forgoten to make a payment and my lender can never claim it did not receive a payment.

Des.

Re: Late on Mortgage Payments DURING Chapter 7

StartingOver10 — Fri, 01 Jan 2016 15:30:49 GMT

@despritfreya wrote:
Seemund,

You are worrying about nothing. You now know that, regardless of receiving a bill, you must make your payments on time and in the correct amount. That is a no-brainer and so is using the US Mail if you cannot pay "on-line".

Your payment is due on the 1st and is deemed late if not received by the 15th. After the 15th you have to pay a late fee. There are no other fees and you are not going to be charged for anything other than what your contract permits. If you make this months payment late you better include the late fee. In bringing the earlier payments current I sure hope you included each month's late fee. If you still do not have on-line access you may want to follow these simply instructions:

For US Mail delivery - Send Certified Mail, Return Receipt Requested

1. Write a check for the amount due, including late fee - if applicable;
2. Place on the check the Certified Mail Receipt Number (I put it at the top of the face of the check when I send my payment);
3. Take a copy of the check before placing in the envelope;
4. Mail Check - keep the receipt and, when the green card comes back staple both to the copy of the check;
5. When you get a bank statement showing the check was cashed take a copy of that bank statement and attach it to the copy of the check.

If you do this with each and every payment - each and every month - you will never, ever miss a payment again. I have been doing this for 14, count them, 14 years. I have never missed or forgoten to make a payment and my lender can never claim it did not receive a payment.

Des.

I agree with the above, except for the statement that there are no other fees. I am a Realtor and see the results of late payments from clients in Bk and after Bk.

The fees I see on past due payments (from clients of mine), in addition to the late fee include the following:

1) Property Inspection Fees - these fees include drive by fees and are typically added when you are beyond 30 days past due

2) BPO fees - even if the agent only completed a drive by and did not enter the property

3) Attorney Fees

4) Property "Preservation" Fees - which is later in the process

5) Other foreclosure fees - including filing fees

While you are in Bk the fees can not be charged, but they will add them to your account the minute you are discharged.

Do send your payments as despritfreya suggests so you have proof of payment and delivery.

Do check the status of your account by calling the Bk dept asap. You need to know the amount outstanding and get an itemized list if possible (might be hard during the Bk).

Read your note and mortgage to see what fees the lender can charge. It is in writing and you were notified at the time you signed the mortgage.

Don't rely on the bank/lender "doing the right thing" for you.

Here is a link from NOLO that has more detail http://www.nolo.com/legal-encyclopedia/what-fees-can-the-lender-charge-if-im-late-mortgage-payments.html

Re: Late on Mortgage Payments DURING Chapter 7

seemund — Fri, 01 Jan 2016 17:02:22 GMT

Thanks for the replies.

I've sent close to $5,000 already, and this amount included fees and everything else.

At first, the amount was showing in a "suspend account", but after sending the full amount (close to $5,000) all the money I sent has been applied towards the mortgage (principal/interest/escrow). My latest bill statement only shows January's mortgage, and nothing being late or "on hold".

I called the mortgage company when I made the payment and they said I was current on the mortgage, so I believe I'm worrying for no reason, as stated above.

I will send the check for this month's mortgage before the 15th and create the habit of doing so, just to avoid any complications.

* I just got into the habit of "paying before the 30th = OK" before filling bankruptcy. I guess this needs to go away.

thanks

Re: Late on Mortgage Payments DURING Chapter 7

StartingOver10 — Fri, 01 Jan 2016 19:36:04 GMT

@seemund wrote:
Thanks for the replies.
I've sent close to $5,000 already, and this amount included fees and everything else.
At first, the amount was showing in a "suspend account", but after sending the full amount (close to $5,000) all the money I sent has been applied towards the mortgage (principal/interest/escrow). My latest bill statement only shows January's mortgage, and nothing being late or "on hold".

I called the mortgage company when I made the payment and they said I was current on the mortgage, so I believe I'm worrying for no reason, as stated above.

I will send the check for this month's mortgage before the 15th and create the habit of doing so, just to avoid any complications.

* I just got into the habit of "paying before the 30th = OK" before filling bankruptcy. I guess this needs to go away.

thanks

So glad you have paid all the outstanding amounts due. Also pleased that you no longer have funds in a suspense account. Suspense accounts are the absolute worst for the consumer because the bank/lender/servicer has your money but it is not applied to your outstanding balance which continues to accrue interest!

Also note: the servicers can and will report your payments as past due on your credit even if they have your funds sitting in a suspense account. It is a pretty neat accounting trick (not) that allows the bank servicer to have the cake and eat it too. There is a brand new rule by the CFPB regulating these accounts now (Jan 2014). That is a good thing as there were tremendous abuses in the very recent past. Here is a link for more details: http://www.nolo.com/legal-encyclopedia/what-is-mortgage-suspense-account.html

I am also happy to see that you understand that creating the new payment habit is critical. Just an FYI, the lender/servicer keeps an internal record of your payments and they are catagorized as paid in 0-5 days, 6-10, 11-15, over 15, over 30 etc. You will boost your internal score with your lender if you can make it within the first 5 days of the due date IMO.

Re: Late on Mortgage Payments DURING Chapter 7

mexley — Tue, 12 Jan 2016 01:55:20 GMT

I called my mortgage company to see if they could defer a payment or two because I lost my job and we are mid chapter 7 (waiting for discharge). I was told by my mortgage company that they could not do a deferment since I was in the bankruptcy but that we could just not make the payment. I told them I was worried about foreclosure and they told me that they would not start foreclosure until we are 8 months behind and then at that point they would contact an attorney and it would be at least another 6 months until they actually foreclosed. He said to just not pay a month or two and then when I start making payments again, send a little extra each month to help catch it up. Not sure how your company works though.

Re: Late on Mortgage Payments DURING Chapter 7

StartingOver10 — Tue, 12 Jan 2016 13:08:02 GMT

@mexley wrote:
I called my mortgage company to see if they could defer a payment or two because I lost my job and we are mid chapter 7 (waiting for discharge). I was told by my mortgage company that they could not do a deferment since I was in the bankruptcy but that we could just not make the payment. I told them I was worried about foreclosure and they told me that they would not start foreclosure until we are 8 months behind and then at that point they would contact an attorney and it would be at least another 6 months until they actually foreclosed. He said to just not pay a month or two and then when I start making payments again, send a little extra each month to help catch it up. Not sure how your company works though.

^^^this is really bad advice that the CSR gave you. It is true that mortgage companies do not defer payments like a car finance co. You would have to go in for a modification of your mortgage. Foreclosure procedures do vary from state to state - some are judicial and some are non-judicial which takes much less time to complete. The CSR that gave you the timeline quoted above has no control over when a f/c is filed. I routinely see lis pendens filed after 90 days in my county. Don't rely on a CSR.

If you want to keep your home, then make the payments. If the payments are too much, then change your paperwork to surrender your home. Or just stop paying and let the bank foreclose. If the home is iib, it won't affect your CR.

Re: Late on Mortgage Payments DURING Chapter 7

DaveInAZ — Tue, 12 Jan 2016 21:15:10 GMT

Good points by Starting over. I would add never trust what a rep tells you over the phone - it's not legally binding, they can deny ever saying that. If you need to delay making payments call them back - you'll probably get a different rep, ask them to confirm what the other rep said, and then tell them you need a letter from them confirming that.