Miami Personal Bankruptcy Lawyer Jordan E. Bublick has over 25 years of experience in filing Chapter 13 and Chapter 7 bankruptcy cases. His office is centrally located in Miami at 20801 Biscayne Blvd., Suite 403, Miami and may be reached at (305) 891-4055. www.bublicklaw.com
The new HAMP rules that went into effect June 1, 2010 greatly increased the attractiveness of Chapter 13 as a platform to obtain a HAMP mortgage modification. Basically, by filing both a HAMP mortgage modification and a chapter 13 bankruptcy at the same time, one may be able to do all of the following at the same time:
- Obtain a modification of the first mortgage
- Avoid the second mortgage (ie. "equity line") if it is "underwater" due to a fall in value
- Reorganize unsecured debt
The HAMP guidelines provide the following new provisions:
- Bankruptcy - Homeowners in chapter 13 are required to be considered for HAMP upon request.
- Chapter 13 Plan - The chapter 13 plan may provide for anticipated or estimated HAMP modified mortgage payment which is normally 31% of gross income.
- Waiver of Application - The mortgage servicer may accept the bankruptcy schedules in lieu of the Request for Modification and Hardship Application to determine eligibility for HAMP.
- Cooperation Required - Mortgage servicer must work with the homeowner to obtain Bankruptcy Court approval.
- Waiver of Trial Period - Mortgage servicer may waive trial period mortgage modification and provide a permanent mortgage modification if the chapter 13 plan had been providing the amount of the proposed modified mortgage payment.
- Investor Approval - Mortgage servicers must use "reasonable efforts" to obtain approval from investors to participate in HAMP.
- Reconsideration - Ability to seek reconsideration of HAMP denial.