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Is there still a way to save my house if the foreclosure procedures are going through?

Barrington, IL |

Can i still apply for HAMP through my first lender, even after my spouse and I have filed for bankruptcy Ch7. I have a lien on the house from the second mortgage. So is there a way still get a modification on the first mortgage? If the modification process is approved can the first lender continue with the foreclosure procedure in the mean time. Please advice we already have a court date set for the foreclosure. thanks.

Attorney Answers 2

Posted

Yes, you can apply, but it's not really a program that has a high success rate. The foreclosure can be stayed if you are in the process. Whether it will actually work at the end of the day is something that's hard to say.

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1 lawyer agrees

Posted

Go for it. Some people have a better chance (luck) of getting a loan modification after filing bankruptcy because the bank knows that they are protected from a deficiency. It almost puts you in a better bargaining position. Apply through HAMP, and even the bank's in-house program if HAMP doesn’t work. I could give you a complicated answer regarding your second mortgage, but I'll just say don't worry about them right now. They continue to have a lien on the property, but it shouldn't stop you from applying for a loan modification with your first lender. The first lender can continue the foreclosure. They are only required to stay foreclosure if you enter into a trial modification and are making payments, or stay the sale until you are properly considered for a HAMP (and only applies to HAMP) modification. See section 1508(d-5) of the IMFL.

The information in this answer is not intended as legal advice nor do I intend to create an attorney-client relationship with any reader simply by answering this question or contributing as a member of AVVO.

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3 comments

Asker

Posted

Say if the 1st loan is modified and we enter the trial period of 3 years or 5 years depending on what is approved, and in the future we try to sell the property, does the 2nd mortgage still come back and collect from us from the sale if its sold. OR do they say since you are able to make the payments on the first one, than now you can pay us a well. So technically is it really worth doing all the modifications. 2nd mortgage still stays as is right? I just want to know how will the 2nd mortgage affect the property in the future. please write back. Your help is appericiated.

Mara Ann Baltabols

Mara Ann Baltabols

Posted

There may be some complications if you try to sell the property. The second mortgage lien will stay on the property and will have to be released prior to sale. You would probably have to hire an attorney at that point to help you get the lien off your property so it could be sold free and clear. But, at this time, worry about getting a loan modification with the first. If a single bank owns the first and second, you can try to modification the first and second through one loan modification. Getting a modification is not easy though. I don’t want to give you that impression.

Asker

Posted

Yah its not, the 1st lender is saying that we need to re-instate their mortgage, for them to consider the loan for the HAMP program.

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