Mortgage Reaffirmation Questions

[saint782]

Getting closer to the end here...341 was on 5/14 and no news is usually good news so hoping to get my discharge soon.

Had some questions though about Mortgage Reaffirmation and curious is anyone might be able to lend some advice.

We decided to reaffirm our Mortgage which is with Chase. I hear a lot of back and forth and pro/con on this but we figured in our situation it was worth doing. Never been late on payments, we have equity, and we want to go back to auto pay, and payments being reported.

That being said Chase is being slow about the documents, we submitted it they didn't like them for whatever reason and want them redone..etc.. these are my concerns.

1. If we don't get the reaffirmation paperwork in on time before Discharge are we out of luck?

2. Home prices are just going through the roof in my area ( still protected by exemptions) but if we don't reaffirm is there some crazy chance that Chase is going to try and take the house even if we make payments on time?

3. Will refinancing some day to a 15 year or a lower interest rate not be possible if we don't reaffirm.

Curious on people's thought's, don't want to delay anything or make things harder then they need to be

Thanks

Josh

[justbroke]

We decided to reaffirm our Mortgage which is with Chase. I hear a lot of back and forth and pro/con on this but we figured in our situation it was worth doing. Never been late on payments, we have equity, and we want to go back to auto pay, and payments being reported.

Reporting and automated payments are not a good reason to reaffirm any debt which does not require reaffirmation. Credit is also not a good reason to reaffirm debt. Usually, I would say to reaffirm when it's required (mandatory) and you'd lose the property without the reaffirmation.

Let me add this. There are sometimes where an otherwise optional reaffirmation agreement can be useful. That is when the reaffirmation agreement includes a change in terms. Most creditors will not allow a reaffirmation agreement that modifies the terms of the original loan, so those are hard to come by. Some credit unions have been known to change interest rates with the reaffirmation agreements.

That being said Chase is being slow about the documents, we submitted it they didn't like them for whatever reason and want them redone..etc.. these are my concerns.

Did Chase send you the reaffirmation documents or did you -- or your attorney -- draw them up yourself? Otherwise, it makes no sense not to accept them unless they were altered in some manner.

1. If we don't get the reaffirmation paperwork in on time before Discharge are we out of luck?

Yes. You can't enter into a reaffirmation agreement after the discharge. Most courts won't even let you vacate the discharge for the purposes of entering into a reaffirmation agreement. Nearly every court finds an "optional" reaffirmation agreement to not be in a debtor's best interest. But the courts do allow them so long as it's not a hardship. If the discharge has already been entered, it would be hard pressed for a judge to vacate the discharge to allow for a reaffirmation agreement.

2. Home prices are just going through the roof in my area ( still protected by exemptions) but if we don't reaffirm is there some crazy chance that Chase is going to try and take the house even if we make payments on time?

No. Seems like a reaffirmation is not even required. The only way for Chase, or any bank, to take any action on the home after discharge is because terms in the note are not met... which is almost always non-payment under State non-bankruptcy law.

3. Will refinancing some day to a 15 year or a lower interest rate not be possible if we don't reaffirm.

No. It would be entirely possible. It's even possible, in some cases, to get a discharged debt to continue to report by waiving any rights related to a violation of the discharge injunction on collecting. Some debtors have found that a letter, written from their attorney, which absolves the creditor of any wrongdoing for continuing to report, is sufficient to get reporting restarted. I don't know if this will work for Chase.

In the long run, reaffirmation for the sake of reporting is usually not recommended.

Your case should be subject to discharge after 7/13/2021, so that's just next Tuesday. While the reaffirmation does not need to be docketed by the discharge, it must be entered (signed by all parties) by the discharge date in order to be effective.

[saint782]

Thank you that really clarified things I appreciate the information!

[saint782]

So the saga of all this continues. I’ve now sent the signed document to Chase six times and each time they have some minor issue with the paperwork. They told my attorney a motion to extend our case would need to be filed..He said he’s never done that and I had enough finally and said no to the reaffirm. This wasn’t something he advised I do anyway and Chase is being unreasonable at this point.

[justbroke]

I wouldn't have the case extended. It is what it is at this point.

You have to realize that Chase usually doesn't care about reaffirmations. It's probably a pain for them when someone wants one so they may, intentionally or not, have "issues" with the contents.

For a large creditor, such as Chase, insight into how much they care about reaffirmations is important. Do they want to generate thousands of potential legal review -- which is likely why it keeps getting rejected -- for something that technically isn't worth much to them in the grand scheme?

[saint782]

Good points. In the end better off.