Mortgage Arrears Discrepancy with Bankruptcy
My question involves bankruptcy in the state of: Maryland
In 2010 we filed for Chapter 13 Bankruptcy to avoid foreclosure after company strikes and major illnesses, and tax problems in the family left us in a deep hole. Once our bankruptcy proceedings were finalized, we made regular payments to the Mortgage company per their agreement of our regular payment, plus another amount to catch up, for a year. Along with those payments we did not realize the Trustee was sending payments to the Mortgage company. The first order from the court stated our agreed on payment plan, which we stood with the Mortgage company lawyer in the courthouse and made, and then he presented to the Judge. We received this document saying 'So Ordered' from our lawyer. There was a previous order but we were not financially able to keep it and had to go back to get it modified, which the Mortgage Company agreed upon.
Twice during the year the Mortgage Company stopped accepting our payments, told us we were in default and not keeping our payments, which wasn't true, and we, the lawyer and the trustee sent them the documents they said they didn't have any record of. They said they have no such documentation. It seemed like no one there ever knew what was going on and they were holding on to the old order for us to abide by. Once we sent them the paperwork, they allowed us to resume payments, and then in July of this past year our lawyer informed us that not only had we paid the arrears, but because of the Trustee also paying we overpaid the Mortgage Company. He told us we could leave the Bankruptcy and work with the Mortgage company, and we did. For two months things went fine, and then the mortgage company said they were restructuring our loan and not to worry, don't send any payments until we received our new payment plan. They kept telling us this for three months, and we kept calling them because we heard nothing from them. Each time we called or wrote we received a phone call of, "Tell your family not to worry, we are just getting things finalized" or such. Now last month later they said we were in default according to their records and they are now proceeding with foreclosure. At first they said they had no record of any payments from the Trustee, then when they were sent copies they said they had no order that allowed us to pay the way we did, then when we sent that they said they can't find any paperwork at all, etc. We sent letters to them, Bankruptcy information, the lawyer sent info. Nothing from them except they now want the house. We have a significant amount of equity in this house now. The lawyer says we can re-apply for Bankruptcy, but we don't know if that would be wise. The money they say they want is the money we have already paid. We honestly don't know what to do and are trying many of the home help agencies to see if anyone has ever dealt with this before. We are at a loss on what steps to take, do we have any legal options that we can afford to take?
Re: Mortgage Arrears Discrepancy with Bankruptcy
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Ellwind
Once we sent them the paperwork, they allowed us to resume payments, and then in July of this past year our lawyer informed us that not only had we paid the arrears, but because of the Trustee also paying we overpaid the Mortgage Company. He told us we could leave the Bankruptcy and work with the Mortgage company, and we did.
In other words, you obtained an early discharge of your Chapter 13 bankruptcy, so the present issue with the bank has absolutely nothing to do with the bankruptcy?
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Quoting Ellwind
For two months things went fine, and then the mortgage company said they were restructuring our loan and not to worry, don't send any payments until we received our new payment plan. They kept telling us this for three months, and we kept calling them because we heard nothing from them. Each time we called or wrote we received a phone call of, "Tell your family not to worry, we are just getting things finalized" or such.
Did you apply for restructuring? What information were you required to provide to the lender to verify your qualification for this program, and did you submit it? Is any of the communication from the lender in writing? Is the lender refusing to allow you to belatedly make your payments, so as to make your loan current?
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Quoting Ellwind
At first they said they had no record of any payments from the Trustee...
They're presently saying that, or are we hopping into a time machine and traveling back to when the issues arose during the bankruptcy?
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Quoting Ellwind
The money they say they want is the money we have already paid.
You previously appeared to be stating that they told you to stop making payments during the restructuring process, and are now foreclosing based upon the three payments you missed during that period.
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Quoting Ellwind
The lawyer says we can re-apply for Bankruptcy, but we don't know if that would be wise.
Your lawyer knows the full facts, and also what the bank has actually done, so whatever we tell you won't be as reliable as what you hear from your lawyer. We're not in a position to second-guess your lawyer. There seems to be more to the picture than you've told us, though, given that your lawyer is talking about going back into bankruptcy rather than trying to compel the lender to carry through on the restructuring or to give you credit for money you've already paid.
Re: Mortgage Arrears Discrepancy with Bankruptcy
We did not apply for restructuring. We were just making our normal payments. The Mortgage Company just told us in August that they were going to do it and to wait for the paperwork, also not to send in any payments at that time. Each time we called they said they were sending the paperwork, but never sent us anything. Every office we called said we should be receiving some paperwork. At one point the remediation office said that they could see what the Mortgage company was trying to do and it was wrong, and they would try to help us, but then we couldn't contact that person anymore.
The Mortgage company is basing the foreclosure on the amount from the bankruptcy, not on these months currently. They say we still owe some of the money paid during the bankruptcy.
The lawyer talked about going back into bankruptcy in order to halt proceedings and get them into court so that we can address the issue, if we wanted to. We don't think we should have to go through that again, because we have paid and have bank statements, receipt from the Trustee account, and receipts from them showing we paid more than what we were supposed to. But it will cost us to try to take them to court. As long as they say we did not pay them and they have no records of our payments, they won't do the restructure.