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#2174841 - 04/24/18 02:28 PM Bankruptcy
bamboozled Offline
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Joined: Jan 2012
Posts: 280
Just want to make sure I am reading and understanding this correctly......

We have a number of loans that have been discharged under Chapter 7 bankruptcy so they are no longer contractually obligated to pay, however we have some that reaffirmed the debt and some that did not and continue to pay.

Do those that reaffirmed the debt receive the standard periodic statements.
Do those that did not reaffirm the debt but continue to pay receive the modified periodic statements?

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Mortgage Servicing Rules
#2177078 - 05/08/18 03:07 AM Re: Bankruptcy bamboozled
Ms. X Offline
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Joined: Jan 2018
Posts: 24
Can anyone answer this - Do those that did not reaffirm the debt but continue to pay receive the modified periodic statements?
Thanks!

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#2177170 - 05/08/18 03:47 PM Re: Bankruptcy bamboozled
GTS333 Offline
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Joined: Jun 2010
Posts: 256
You'll want to double check this with your bankruptcy legal counsel in case I'm missing something, but I think if the consumer reaffirms the debt you'd be required to start sending the standard statement again. I know you lose the exemption from the requirement to send periodic statements under 1026.41(e)(5)(i) in that case, and I think the correct statement would be the "standard" periodic statement, not a bankruptcy version.

For those that get a discharge you continue to send the modified bankruptcy versions of the periodic statement because they no longer owe the debt. You do that presumably until you foreclose on your lien or take whatever action you want to around your security interest in the property.
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My opinion, take it for what its worth. Opinions expressed are my own and not those of my employer and are not legal advice.

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#2177826 - 05/11/18 03:11 PM Re: Bankruptcy bamboozled
deh Offline
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Joined: Mar 2006
Posts: 866
We are having issues with our software provider making us able to send modified statements to discharged BK loans that did not reaffirm and are still paying. Anyone else experiencing problems with this?

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#2177828 - 05/11/18 03:16 PM Re: Bankruptcy bamboozled
GTS333 Offline
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Joined: Jun 2010
Posts: 256
I don't fully understand your question as written, deh. Why do you have borrowers who discharged the mortgage in their bankruptcy still paying on underlying mortgage?
_________________________
My opinion, take it for what its worth. Opinions expressed are my own and not those of my employer and are not legal advice.

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#2177885 - 05/11/18 06:24 PM Re: Bankruptcy GTS333
Questions Offline
Member
Joined: Jun 2009
Posts: 85
We are having the same issue. Our service provider released an update that was supposed to fix this issue, but it did not work...

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#2177892 - 05/11/18 06:44 PM Re: Bankruptcy bamboozled
deh Offline
Platinum Poster
Joined: Mar 2006
Posts: 866
We have borrowers who filed a CH 7 BK and did not reaffirm on the debt. They intend to keep the property and wish to keep paying but their attorney advised them not to reaffirm. We have allot like this.

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#2178038 - 05/14/18 08:31 PM Re: Bankruptcy bamboozled
hij Offline
100 Club
Joined: Jun 2003
Posts: 168
Midwest
Aren't they exempt if they bankruptcy plan doesn't provide for making payments on the mortgage loan?

This is one of the criteria for exemption:

The consumer’s bankruptcy plan provides for the surrender of the
dwelling, avoidance of the lien, or otherwise does not provide for the
payment of pre-bankruptcy arrearage or the maintenance of payments
due under the mortgage loan;

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