I have worked with several clients whose spouse died and they were trying to avoid foreclosure of the family home. If title is not an issue, you or someone you trust should apply to assume the note. If title is an issue, you will have to file a petiton with the probate court. You can file another chaptr 13 bk, but it's often harder the second time around.
Tragedies in life, such as the death of a spouse, can hit one very hard in many ways at once. I am very sorry to hear about your situation and truly hope you can find a way to save your home.
However, the banks are not required to change their agreements with you just because you can't afford the mortgage anymore. In my opinion, the federal government and big banks have made a huge effort to publicize falsely that Loan Modifications are available to everyone for the asking. This is a scam on a massive scale because the government can't print enough money fast enough to give everyone a free pile of cash in exchange for nothing more than a vote.
I have seen thousands of complete loan modification applications, with just a few dozen finally modified. Of course, that's what makes everyone believe the hype - someone DID get a loan mod, so everyone thinks they are available for the asking (perfect urban myth). The limits on loan modifications are very stringent and NO BANK is REQUIRED to issue a loan modification - it is primarily a GIFT to the homeowner, but nothing more than a loss mitigation decision based on economics.
So, as for getting a home loan modification, you have tried three times without success. If your denials are based on "incomplete documentation" then you need to file again and follow up every other day and fax and fax and fax all the documents over and over and over to make SURE your application is COMPLETE. However, assuming your applications were complete and backed up by all the required piles of financial information, but still denied three times, it appears extremely unlikely you will succeed the fourth time.
Here are some ALTERNATIVE suggestions
1. People get very attached to their homes. If you have the money to indulge that attachment, fine. You do not have that luxury. Are you REALLY sure it is financially wise to stay in your home? Often, the loan balance is far in excess of the fair market value and it would be much easier to rent a house or apartment for less than the mortgage payment, taxes, and insurance cost (even after considering the mortgage interest tax benefit, which may be of little help in your low income situation).
2. Assuming the loan balance is less than or equal to the fair market value of your home (i.e., it makes good economic sense to keep the house), here are some options to increase your income and make the loan payments affordable:
A. Rent out rooms
B. Rent out the garage
C. If the back yard is large enough and local codes permit, perhaps you could rent space in your yard for long term storage of RVs, boats, or cars.
D. Be sure to file a notice of appeal of property value with the local property tax authorities so the property taxes are as low as the current value of the house will permit.
Unfortunately, a second Chapter 13 likely will not "save" your home. It may delay the inevitable a few months, but that is all.
Finally, if you are in Chapter 13 right now, but you are already 4 months behind on your mortgage payments, the lender is not required to wait until your Chapter 13 is over to begin foreclosure. It is possible that the lender will ask the bankruptcy court for permission to foreclose despite your bankruptcy (it's a called a Motion for Relief from the Automatic Stay). In your fact situation, the Bank will likely allow the foreclosure.
I strongly urge you to pursue the additional income methods IMMEDIATELY and you can also pursue a fourth try at a loan modification (the extra income MIGHT help your chances with a loan mod).
If you need further clarity, please email me at MICHAEL@MIRELAND.US Answers to questions are for general information purposes only and do not establish an attorney-client relationship. This is not legal advice, simply information. You SHOULD NOT act on this information without consulting a competent bankruptcy attorney in your area and providing ALL relevant information.
If you're only 4 months behind, you have some time to work things out with WF. Keep trying to modify and try to catch up on the payments. If it doesn't work out, another Ch13 would be the way to go ... but, as you know, you will have to make your post-petition mortgage payments as they come due.
There is a big difference between "required to work with you" and "required to reduce principle."
Mortgage modifications without professional help are rarely successful. For better or for worse, it is pretty much impossible in your state for a professional to stay in business while working on modifications.
The bank is not required to reduce the principal. What are the reasons for denying a loan modification? If insufficient income is the reason and you wish to remain in the home have you considered renting out a room in your home to assist you with payments?
I am not YOUR lawyer. You should not rely on answers to questions as legal advice. For legal advice you should contact a law firm for a consultation. Tokarska Law Center 185 West F Street #100, San Diego, CA 92101 (619) 285-1992 www.sdbankrupt.com Tokarska Law Center is a Federal Debt Relief Agency representing individuals and businesses in filing for bankrutpcy protection under the U.S. Bankrutpcy Code.
These are all very good answers that you have received. I would just like to add that from my experience, the most likely reason for your difficulties with Wells Fargo is that you are dealing with Wells Fargo. They are notoriously difficult to deal with in any sort of modification situation. Therefore, one other thing you might try, if you haven't already, is to see if you can re-finance your loan under one of the various Federal or State programs that are available to you, such as the HAMP program, but do so through a different lender. I have seen people eliminate Wells Fargo from the picture by getting a new loan put in place from a different lender under more favorable / affordable terms. Just a thought . . .