I applied for a loan modification
9 months ago - I have completed the paperwork in whole 4x and in part many more times. I have contacted the lender at least 2x/month and made all my trial payments on time. I had planned to file Chapter 7
as soon as my loan modification was approved.
When I called to make my payment this month, I was told I was no longer in the loan modification program because my information had "expired” AND they could NOT accept my payment.
Because I was 3 payments behind, my house is technically in foreclosure. I was told to reapply for loan modification and the representative said they would “accelerate” my file – this had happened to many customers this month.
Several months ago, I was told by the lender that if I filed bankruptcy, my case would have to start all over because it would go to the bankruptcy dept. rather than loss mitigation.
If I file Chapter 7 now, rather than start the loan modification over, what will happen to my home?
My 1st mortgage is app. $460,000 which is about the current market value of the home. I have 2 additional equity
lines totaling app. $150,000 and have not made any payments on for almost 12 months.
I would like to keep my home.
For a variety of reasons, and because I thought my loan modification was almost finalized, I rented my home for $1000 more than my loan modification trial payment and rented a more affordable home with a friend.
Technically, the house is still my residence and I receive mail there.
Should I just reapply for the loan modification or go ahead and file Chapter 7 now?
If I file Chapter 7 what is most likely to happen to my home?
My original loan was a libor – interest only – assuming even with taxes and insurance, the payment would still be less than the rent
I'm receiving, but not sure how the bankruptcy would view the overdue payments?
Would the court/trustee
allow me to continue paying my first mortgage payments even though the house was rented? Would I have to make payments on the 2nd mortgages in order to keep the house, even though they are essentially unsecured at this time?