Mortgage reaffirmation questions

[Cubby214]

My 60 month plan us about over. August will be my last payment. My house is outside of my plan and I've continued to make timely payments to both mortgages. My second mortgage (US Bank) shows up on my credit report but my primary (Greentree) does not. Just wondering what my options are after my 13 is discharged later this year. I want to keep my house but do not understand the reaffirmation process. My second mortgage will be paid off in 2018 and I was thinking about trying to pay it off extra but since its the only thing reporting positively on my credit report, I'm wondering if I should just keep it and wait until it's paid off naturally in 2018. Could someone please give me advice on the reaffirmation and/or second mortgage payment option? Thanks in advance

[justbroke]

There is no reason to ever reaffirm any debt. At least that's my opinion on this subject. Allow your personal responsibility to pay the debt to be discharged. Continue paying on time and in the correct amount. You will be perfectly fine. I'm not that I've ever read a case where a debtor has reaffirmed a debt in a Chapter 13.

[Cubby214]

But how does it work if I want to sell the house in a couple of years and buy another? Or if I wanted to try and refinance with another company to get a lower interest rate?

[LadyInTheRed]

I don't think you can reaffirm a debt in a Chap 13. Besides, if your plan indicates you will retain your home and the mortgage is not paid off during your Chap 13 plan, the debt is not discharged like it would be in a Chap 7.

Even if a mortgage is discharged, the sale or refinance process is the same as if there is no discharge. The new lender or the title company will request a pay off amount from the old lender. Once the payoff is made in the sale or refinance, the original lender must release its lien and the new lender will record its lien.

[drew999999]

I've also run into this with my mortgage lender. I believe it has more to do with the lack of education of the CSR's about Chapter 13 BK's. Since Chap 7's seem to be much more common, my lender was somewhat confused about it. I noticed that my mortgage was showing as closed on my credit report after my discharge. When I contacted them, they stated that I was supposed to reaffirm the loan prior to discharge. After a short panic attack, I read up (and got a few bits of advice here) and found that there is no formal reaffirmation process in Chapter 13 cases. After another call to the lender, I got a very knowledgeable CSR that said it was bad information that the first had given me. Still in the process of getting them to start reporting on my mortgage though. She did tell me that they do not report during BK as to prevent bad reporting that can cause legal issues for them. They said that they will start reporting again, but it will only be from the discharge date forward and that they would not report any months during the BK. I guess a newly reported open/active mortgage has to be better than no reporting at all.