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Save Your House After Loan Modification Default in NJ

April 7, 2013 by Robert Manchel

What happens if someone defaults on a mortgage after the loan was modified?
A person that defaults on a loan modification may be able to obtain a second loan modification. This blog assumes that the person is unable to obtain a second loan modification after defaulting on the first loan modification.
A person who falls behind with their mortgage after entering into a loan modification, may be able to save their house through bankruptcy. As I explain in my website, a person is able to save their house and stop the foreclosure action by paying the pre-filing mortgage arrears through the bankruptcy plan, in addition to paying the regular monthly mortgage payments directly to mortgage company.
The terms of the mortgage that is relevant at the time of the bankruptcy filing are the loan modification terms and not the terms of the mortgage prior to the loan modification. This means that the amount of the default relates to the amount that you are behind after the loan modification. Also, the monthly payment that is due going forward is based on the loan modification terms. Consequently, the amount that must be paid to the mortgage company through the bankruptcy plan is the amount that a person is behind since the first loan modification payment, which does not include the amount of the arrears prior to the loan modification. Also, the monthly payment that must be paid to the mortgage company, after the bankruptcy filing, is the amount that is required under the loan modification and not the amount that was due prior to the loan modification.
Please note that the first payment of the loan modification does not mean the first payment of the trial period payment.
Robert Manchel can be contacted at (866) 503-5655 if you’re at risk of losing your home.

Filed Under: Mortgage

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      Manchel
      New Jersey
      Bankruptcy Law

      This web site is designed to provide general information regarding the bankruptcy laws. The bankruptcy laws are complex and may be applied differently, in each case, depending on the particular facts. There may be numerous exceptions and variations for each law and rule. Do not rely on the information provided in this web site. If you are considering filing for bankruptcy protection, you should consult with an experienced NJ bankruptcy lawyer. We are a debt relief agency. We Help people file for bankruptcy relief under the bankruptcy code.

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