How can I go about reducing my principal in primary residence? 10 Answers as of March 06, 2014

I have filed for Chapter 7 bankruptcy in 2010 and had one modification done to my mortgage there after. My mortgage was not reaffirmed. I currently owe $117,000 with $50,000 deferred on the home but the current fair market value is at $45,000. Will I be able to ask my lender to reduce my note any?

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Tokarska Law Center
Tokarska Law Center | Kathryn U. Tokarska
Able to ask, of course. Able to get it, not likely but it never hurts to ask. If they're not willing to reduce the principal balance the other option is to give them the asset. People choose to remain in a home for various reasons and sometimes that decision is not based on financial reasons only.
Answer Applies to: California
Replied: 3/6/2014
Law Office of Marlin Branstetter
Law Office of Marlin Branstetter | Marlin Branstetter
My experience has been that banks will not discuss any type of modification without a signed reaffirmation agreement. I don't know if you would be successful under any circumstances; you sem to be looking for a significant principal reduction. There are costs and fees involved in re-opening your case in order to file a reaffirmation agreement and your prospects don't appear to good that you would achieve your goal of receiving a principal reduction. It doesn't hurt to approach the bank with an offer. As they say "don't ask don't get".
Answer Applies to: California
Replied: 3/5/2014
GARCIA & GONZALES, P.C. | Richard N. Gonzales
You can ask but there would be no reason for the mortgage company to reduce what you owe. If you wait four years from the date of filing your Chapter 7, you can file a Chapter 13 and strip the 2nd mortgage. To strip the 2nd mortgage, the FMV of the property must be LESS than what is owed on the 1st mortgage.
Answer Applies to: Colorado
Replied: 3/5/2014
Bird & VanDyke, Inc.
Bird & VanDyke, Inc. | David VanDyke
There is no way to force this type of modification on the bank. You would think, after all that has happened, that the bank could throw you a bone so to speak and reduce the principal balance. I doubt they will do it. Banks enjoy and are created for receiving money. They do not really know how to give any back even if it may be the right thing to do. No reason you can't try though.
Answer Applies to: California
Replied: 3/5/2014
R. Steven Chambers PLLC | R. Steven Chambers PLLC
You can certainly ask. Whether the lender agrees is up to it. But since you didn't reaffirm the lender is looking at losing everything above the value of $45,000 so there may be some incentive for it to agree to a reduction just to keep you in the home and making payments.
Answer Applies to: Utah
Replied: 3/5/2014
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