Question:

Can a foreclosure proceed during a trial period for a modification?

I was served a summon complain in September 2012, which I served at the court and provided a copy to the bank’s attorney. Prior to that , I had applied for a modification. The modification application was in process at that time. By the end of November the bank sent a package containing my modification temporary approval. I was scheduled to make 3 trial period payments beginning January 1st until March 1st. The documents say that after I make the 3 payments my modification will be permanently approved. Yesterday, Dec 20 2012, I received this Request for Judicial Intervention. I don’t know what to do, or what the bank is trying to do. I actually call my bank this morning to make my first payment, and they told me that the foreclosure status in the process to be removed.

Answer:

As long as what you have stated is accurate, It does not seem that you should be too concerned about the RJI. The RJI will only trigger a foreclosure settlement conference whereas if you had not already received your final modification, you could attend, most suitably with counsel, to advise the Court that you have either received a final modification or your bank is in the process of sending you the final modified terms in which the Court will most likely just adjourn the first conference date 30 days to have you come afterwards to ensure that the matter was settled (via the modification) and then will dispose of the foreclosure action accordingly.

Above and beyond everything else, ensure that all your trial payments were made timely and ensure that if you do not receive the permanent modification after the 3rd payment, that you continue to make the monthly trial payments (i.e. 4th, 5th & 6th payments) even though the trial period only states you are required to make 3 payments. As a safety, if possible, try and make all trial payments via telephone direct ACH debit so that your bank can’t claim they did not receive a payment from you or that they lost the payment you mailed.

With something like this, you should be able to get a free consultation from counsel to help guide you through finalizing the modification of your loan. But again, above all, no matter what, continue to pay the monthly trial payments for as long as it takes until you receive the final modification documents.

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