A Light at the End of the Tunnel?

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Struggling homeowners everywhere--including Iowa, Illinois, and Wisconsin--know firsthand that trying to get a mortgage lender to modify a mortgage is a frustrating, usually futile process.  Maybe you're underwater on your home (that is, you owe more on your home than what it is worth), or maybe you've fallen behind on payments.  You hear about all sorts of "relief" programs that the government is sponsoring--HAMP, Making Home Affordable, and others.  But what most people found was that lenders ignored requests, claimed to lose documents over and over, and then denied the request.

For homeowners in Wisconsin, at least, things may be looking up.  The bankruptcy court for the Western District of Wisconsin, which covers the entire western half of the state, recently decided to participate in a Mortgage Modification Mediation Program.  Under this program, if you file a Chapter 13 bankruptcy in the district, you can petition to have your mortgage lender sit down with you and your lawyer at a table for a mediation.  The goal is to set up a modification that lowers monthly payments to 31% of your monthly income or 75% of your current mortgage payment, whichever is less.  In other courts that have tried this program, wonderful success rates have been reported--much better than trying to get a modification on your own.

So if you live in Wisconsin and are having trouble making your house payment, talk with a local bankruptcy lawyer about whether a Chapter 13 bankruptcy could give you the tools to get a modification done.