Was mortgage reaffirmed or not?

[JVan]

Hello All:

Thank you in advance.

I had a Chap 7 discharged Sep/2009. During the filing process, I had a mortgage loan mod. request with my bank. I didn't plan to include our mortgage in the bankruptcy. However, I do not recall actually signing a reaffirm agreement for the mortgage.

Anyways, shortly after the discharge, I was granted a Loan Modification. Since then, our statements say "voluntary payments" due to BK, which makes me think that the mortgage was never "reaffirmed".

Am I correct in assuming that?

Does this mean that the mortgage WAS included in the bankruptcy?

See, I'd like to walk away from the house. If I do, should I expect a "foreclosure" to go on my credit report? Or would it just show as part of the bankruptcy?

Thanks Again.

[chriselle]

you did not reaffirm then. Your intention was to reaffirm but if you did not sign a reaff agreement signed by the judge your house is IIB on your credit report.

[JVan]

Voluntary Payments

Thank you Chriselle.

So if I walk away from the house, will there be a "foreclosure" shown on my credit report, or is the mortgage already considered "discharged" as part of the Chap 7 from last year?

I'm under the impression that the effect on my credit is nil, whether I keep paying the "voluntary payment" or not.

Is that true?

[chriselle]

yes, they can not forclose on a debt that's been discharged. the voluntary payment is just for the lender to start forclosure procedure, they can take it away from you but can not report it as forclosed anymore on you credit report

[JVan]

Okay, that's good to know.

Sorry so many questions, but could you explain what you meant by:

"the voluntary payment is just for the lender to start forclosure procedure..."

[chriselle]

typo, if you are not delinquent on your mortgage and did not reaffirm, the voluntary payment will prevent them from starting a forclosure.

[JVan]

Very good. It just seems like an unfair advantage to me, y'know? Given the fact that the only incentive for me to keep paying on this upside-down mortgage, is that I can keep living in the house.

I'd think the bank would want a reaffirm agreement signed in order to keep me on the hook for the neg. equity.

So just for a final clarification:

In my senario, I am assuming no risk of financial loss, and my credit report will be unchanged if I choose to stop paying and move out.

Is that true?

THANK YOU!

[chriselle]

yes. The mortgage is already IIB in your credit report. If it has been chaged in bankruptcy you should see a 0 balance there.

[JVan]

Okay. So I pulled my Equifax report today, and several accounts show a status "INCLUDED IN BANKRUPTCY".

However, my current mortgage was in the "Open Account" section and the status shows "PAYS AS AGREED".

I did not sign a reaffirm agreement, so why is it showing up as an open account?

So what should I expect it to show if I stop paying the mortgage?

[lrprn]

So what should I expect it to show if I stop paying the mortgage?

If you intend to surrender the house to the lender during or after your bankruptcy *and* you didn't sign a reaffirmation agreement for the mortgage after filing, then when you don't make the payments eventually the lender will petition the court to take back your house. Your credit report will show the house with the same status as your other debts - IIB (included in bankruptcy). The best part is that until the house sale is scheduled, you can stay in the home for free, saving up for when it's time to move out. Just keep your insurance paid up in case there's an accident on the property.

However, if you want to keep your house after filing, then you have to keep making the payments every month. There's no other way to keep it after filing.

[JVan]

Okay Irprn. Excellent.

Now, if I stop making payments and they foreclose, you said:

"Your credit report will show the house with the same status as your other debts - IIB (included in bankruptcy)."

Will the foreclosure date be reflected on my report, starting a new 9 year clock at that time, or does it revert to the original Chap 7 discharge date?

[jarguello]

Second mortgage charged-off and discharged

Hello everyone, My second mortgage is discharged though chpt 7 and charged-off. Lender will not settle debt even though home is worth less than the 1st mortgage. I went to the city county recorders office and found out they never recorded the lien, i checked with the MERS website also and theres no record of lien there either. Basicly i could sell the property without second lender ever knowing about it! i want to settle this debt i just dont know how, any ideas? Jarguello.