Ch. 13 Mortgage Modification Problem
Donnie Rhodes bought a house seven years ago and took out a 30-year mortgage to finance the purchase. The home is now valued at $155,000, and the outstanding mortgage is $182,000. The mortgage loan documents require Rhodes to make monthly payments of $1000 (amortizing principal, accruing interest, and escrow for hazard insurance and property taxes).
Rhodes sells farm machinery, and as the farming industry took a nose-dive, so did Rhodes’s sales. He went for eight months with no income, but now things have picked up, and he is back to his regular earnings. He has decided to go into Chapter 13 to restructure his debts, but he remains worried about his home. After seven years of regular mortgage payments, Rhodes missed six payments in a row. What must his plan provide? See § 1322(b)(2), (b)(5).