BiggerPockets

Trying to help out a friend here - looks to me like she's going into foreclosure. She had a regular 30 yr mortgage, re-fied about 5 years ago, lost her job last year, income dropped by 60%, so she contacted her mortgage holder, WF, asked/applied for a loan modification. They said she wouldn't qualify unless she missed a payment, she missed one per their suggestion, now they're telling her that she doesn't qualify and not only that, they are refusing to take her payment that she has on her original mortgage, which she has in full and had on time. WF keeps telling her the investors didn't approve her modification and they are going to a different group of investors. On top of this, she's got some bankruptcy attorney telling her to file Chapter 13.

This really sounds strange to me! I'm not sure how they can refuse her payment if she was on time, in full, regular up-to-date customer prior to this attempt at modification.

Anyone heard of this, or have any suggestions? This is in Georgia, and yes, her credit's shot to hell from her loss of income.

The bank will refuse payment if said payment does not cover the entire default amount. The reason is that once they accept any payment they must start the foreclosure process over again. By law as far as I know they must accept payment if the payment cures the default by paying all accrued interest, late fees, attorney fees etc.
They do have the right to refuse a payment if it does not cover all of these items and bring the loan current as if no default had occurred.

Depends on the state's foreclosure laws. In Texas once the note is accelerated (this occurs when foreclosure is filed and notification sent to borrower) the lender does not have to accept anything less than payment in full satisfaction of the note.

Gigi,
Did you get this figured out?

Originally posted by Gigi Blanton

She currently owes and has the money for May and June in an account.

My understanding of the situation is that she's got everything up-to-date, with the exception of these two payments they are refusing to take.

Most likely, if she's missed May and June payments, then interest, fees and penalties have accrued as well. She needs to call WF and ask how much it will take to bring the loan current; once she has that $$$ figure, she should write a check for it, and have it delivered certified mail.