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legalgems, Lawyer
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Our mortgage payment quadrupled and we had to apply for a

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our mortgage payment quadrupled and we had to apply for a loan mosification
JA: Because real estate law varies from place to place, can you tell me what state this is in?
Customer: Maine
JA: Has anything been filed or reported?
Customer: we have done all the paperwork but no answer yet
JA: Anything else you want the lawyer to know before I connect you?
Customer: should we stop payments before we run out of money. we are elderly retired and limited assets. the bank still takes from our checking account for the payment. should we stop this

Hello! I will be reviewing your question and posting a response momentarily; if you have any follow up questions please respond here. Thanks!

Customer: replied 4 months ago.
We cannot let the bank take our home. We have no place else to go....never had a late or missed payment and bank seems so cold about it all. in 3-4 months we could be out of money. no money for our monthly bills we lost 90% of IRA during 2008 market fiasco bank will not just refinance because of our limited income
Customer: replied 4 months ago.
really cannot afford the cost of phone call. let's try the email for now thanks
Customer: replied 4 months ago.
should we stop payments must we be in arrears in order to get the modification

I am sorry to hear that you are experiencing financial difficulties; the Consumer Financial Protection Bureau precludes foreclosure while a loan modification is pending - please see homeowner rights here:

http://files.consumerfinance.gov/f/201301_cfpb_servicing-fact-sheet.pdf

However, many people will try to stay current because it does not stop the foreclosure process; so for example if the homeowner is delinquent and the loan modification request is denied, the auction date can be predetermined which can expedite the foreclosure process. Also if a homeowner defaults on the modification agreement that can result in the lender calling for repayment (immediate) of any delinquent amount- please see below for more information:

https://law.georgia.gov/mortgage-and-foreclosure-information#Book5

Also there is no guarantee that if a temporary modification is approved that it will be permanent.

Lending institutions can be very distant; a bankruptcy proceeding can buy time (ie the bankruptcy stay) but generally does not provide much relief. CH 13 is available for homeowners that need to restructure their debt, but to be effective it typically requires enough income so the person can afford their mortgage.

Furthermore one need only show dire circumstances versus actual default to qualify for loan modification programs.

Further questions? Please post here to continue the chat.

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Information provided is for educational purposes only. Consultation with a personal attorney is always recommended so your particular facts may be considered. Thank you and take care.

If the payments quadrupled it may be effective to apply for a longer term mortgage, fixed rate, so that the monthly payments are lower. Some resources are here:

https://www.fhfa.gov/Homeownersbuyer/MortgageAssistance

Also please review these options:

https://www.consumerfinance.gov/askcfpb/268/if-i-cant-pay-my-mortgage-loan-what-are-my-options.html

Customer: replied 4 months ago.
$1600.00 is alot of money going out each month when it was just $400.00 a few months ago.
we will not be able to pay after 2 more months. should we just stop the bleeding now? we did not ask for modification. the bank set it in motion....would not refinance because of our limited income butmyet they expect us to be able to make $1600.00 opayments

If payments are stopped then they can begin the foreclosure process unfortunately (based on the default). This can result in additional fees such as late fees and penalties, not to mention legal fees. If a third party lender has not been consulted that may be an avenue because one may be able to secure a more affordable loan. Also the document should be reviewed to determine why the loan went up 4x the original amount.

Customer: replied 4 months ago.
at the time they set up the modification we had only asked for a refinance. in the beginning we had a 20 year conventional mortgage and the next thing we knew it had been converted to a home equity. was that legal for them to do?

The actual application and documentation would need to be reviewed which is an additional service I am unable to participate in; but the mortgage industry did have the recent shake up due to "predatory lending' and other consumer deceptive practices in which case it would be illegal to do.

Customer: replied 4 months ago.
with our excellent payment history why couldn't they have just extended what we were doing for payments?

I'm sorry- that would need to be directed to the lender; but issues such as that are red flags for the predatory lending issue.

Customer: replied 4 months ago.
if the modification is approved should I stop automatic payments just to be safe no one gets into the checking account
Customer: replied 4 months ago.
maybe we should notify an elder affairs attorney? would it be okay for us to contact other banks for refinance help or even the VA thought about a reverse mortgage from another bank
Customer: replied 4 months ago.
we are so afraid that this bank is going to keep taking out their payments from our account until the money is all gone and then tell us we need to move from our home.

Yes, there is no restriction which precludes a borrower from contacting third party lenders for refinancing.

One can stop auto pay and provide physical checks if that is the preference.

If the modification is approved then the new terms of repayment would apply so if the lender took out an additional amount that would be a deceptive business practice and an unauthorized withdrawal and the consumer could sue for reimbursement and possibly punitive damages.

A consumer protection or an elder law attorney can provide assistance.

Please see:

http://www.mainebar.org/page/AttorneyRequest

Customer: replied 4 months ago.
just one more thing...........the original mortgage was for $150,000 and we ahd paid back $25,000 of it when they changed it over to that home equity. They also changed the amount for $200,000 saying it would give us flexibility if we wanted to write a check on it. They were the ones who decided on the amount of the new "loan" saying it was their version of that same conventional mortgage we originally had
Customer: replied 4 months ago.
I had bad feelings about it when they did it but 10 years seemed so far away and we had no idea that it would come, to this.

That has some red flags - so in order to accurately assess the situation that would require document review so I would urge you to review that link and locate an attorney that can review the document.

Customer: replied 4 months ago.
okay... must do that.....will this bank ever get to know I have questions about their practices? may contact an elder affairs attorney also thank you much.

Actually a complaint can be filed here:

http://www.maine.gov/pfr/financialinstitutions/regulated.htm

This won't do much for the individual consumer but can result in revoking licenses, fines, etc.

You are welcome and I hope you are able to resolve this because that is quite a hike. Take care.

Customer: replied 4 months ago.
I just may be too old for this but I cannot lose my home over something I had no hand in.
Customer: replied 4 months ago.
Have also thought they just might want to get rid of us old folks ...not a very pleasant atmosphere when it comes to customers. Many local complaints

Litigation can be one of the more stressful things in life; but the attorney will typically handle most of the aspects of the case, which can be helpful.

I'm sorry - my post did not go through- I had mentioned that while litigation is one of the more stressful things in life, a good attorney will handle as much of the case as possible so that may be helpful.

Customer: replied 4 months ago.
they keep draining our checking account while they make us wait for a supposed modification decision

The site seems to have some difficulties as I could not get my post to "stick". I had mentioned that normally the attorney will handle the complexities of the case.

Customer: replied 4 months ago.
as long as we are in modification mode the bank cannot take our home??????
Customer: replied 4 months ago.
we keep up with the payments

It depends - if it falls under one of the loan modifications in that first link above then they cannot. But if the modification is ultimately denied or breached then they can under any circumstance.

But it is most important to have the documents reviewed to determine what the loan modification program is, before signing, and whether it qualifies for federal protection.

Customer: replied 4 months ago.
I think I understand............my first thing is to get a lawyer to read both documents. I also have the billing statements that look a bit shady too.....fixed rate and variable rate attached to one account number

Yes, make sure and bring all documentation so the attorney can review it; that will save having to email/fax it later.

legalgems and other Legal Specialists are ready to help you
Customer: replied 4 months ago.
okay must let you go.....you do think this is worth going forward with

Yes, it is important to have any legal documents reviewed when a person's mortgage increases 4 fold and they are facing the prospect of default.