Creditor Won't Reaffirm

[gst1980]

I hope this isn't too long, but here goes....

My chapter 7 case closed this past March. All listed debts were supposedly discharged except for those that had been reaffirmed (my auto loan and home mortgage...both through Wells Fargo). However, I just found out today that my mortgage was not reaffirmed. I have been making the payment as usual, of course, but was never informed by either Wells Fargo or my attorney that there was a problem. My attorney blames it on Wells Fargo, saying that they sent signed & dated reaffirmation agreement to them in early February. In late February, Wells Fargo said they never received it. My attorney then faxed them the necessary documents. Wells Fargo says they never received the faxed info, either.

Now, here's my problem: I'm stuck with an ARM (Adjustable Rate Mortgage) and the APR jumped to 11.2% a few months back. Now, Wells Fargo tells me it could jump as high as 13 or 14% this coming August. I simply can't afford that. No way. And they won't re-negotiate my mortgage or reaffirm with the previous agreement. I was told, basically, that their hands are tied in this matter (by their Bankruptcy Mgr.). They say since the debt has been discharged they won't (or, are unable to) make any new arrangements.

As long as I continue to make my regular monthly house payments, I'm fine. But I simply can't afford for this ARM loan to continue going up. We're stretched pretty thin as it is.....

To top it all off, I can't refinance until two years have passed (because my mortgage shows to have been discharged)!

I desperately need some advice. Please.

Thanks much for any suggestions or advice you may be able to share,

GST

[keepmine]

If you have equity in the house, sell it and rent. If there is no equity, give the house up and find a rental. No reaffirmation means, you have no liability for any deficiency balance.

[diviaruba]

Count your blessings. If you had re-affirmed, it would have been with all of the terms of the original loan, which as you stated was an ARM with a high interest rate ceiling. Your payments now and in the future would have been on the same schedule as if you had never filed. It is highly unlikely that they would have frozen the interest rate. The reaffirmed debt would have been permanant and non-dischargeable.

At least now, the debt has been extinguished, and you have more flexibility as to whether you wish to retain the house, assuming you can afford it, sell it and extract any equity you may have (after satisfying Wells Fargo's secuirty interest - the debt is gone, but the lien remains), or walk away and owe nothing.

[JRScott]

Well I wouldn't reaffirm at this point. If you have to let it go it would be better. If you did reaffirm and then lost it because of the ARM then you'd be responsible for the deficient balance, the way it is you can walk away and owe nothing.

[gst1980]

Thanks for the advice!

But....here's the kicker (I failed to include the terms of the reaffirmation agreement in my original post)...the reaffirmation was for a 9.2 fixed. I'm trying to get them to abide by that since I signed and dated it (yet they claim they never received it).

GST

[AngelinaCat]

Thanks for the advice!

But....here's the kicker (I failed to include the terms of the reaffirmation agreement in my original post)...the reaffirmation was for a 9.2 fixed. I'm trying to get them to abide by that since I signed and dated it (yet they claim they never received it).

GST

Was the original paperwork sent by certified mail with return reciept?

[Help!]

Looks like they found a way to stick it to you in the absence of a return receipt from the post office or a fax log. I'm surprised your attorney didn't send the reaffirmation to them certified and get a signature. I'd threaten to walk and if they don't abide by the agreement I'd let go of the house. Why should you run yourself into the ground trying to pay a loan with such a ridiculous rate? I would not want to begin my "fresh start" with such an oppressive ARM.



....

I believe that banking institutions are more dangerous to our liberties than standing armies......

- Thomas Jefferson

[ThreadsSnapping]

I would get it in writing that they never received it and will not reaffirm the mortgage. I have a funny feeling if you try to walk away from it the reaffirmation paperwork will magically appear.

TS

[AngelinaCatHub]

OK, I note, you attempted in good faith. I note all the above posts, I also note that the interest may become higher. I think you are now in the drivers seat. In this climate of today, they don’t want your house. I would advise them that you are now clear and have proof of your attempt and if they will not cooperate, you will walk away and leave them holding the house. GOOD FOR YOU! I don’t think they are realtors. They want their money and interest. If you can afford to pay them, make it on YOUR terms. It is only my opinion. ‘Hub

P.S. if the reaffermation appears, report this to bk Trustee and lawyer. They may be committing law breaking, or scam.

[keepmine]

I would get it in writing that they never received it and will not reaffirm the mortgage. I have a funny feeling if you try to walk away from it the reaffirmation paperwork will magically appear.

TS

It's not enough to just sign a reaffirmation. It must also be filed with the bk court.

[gst1980]

Thanks to everyone for your considered responses. I really do appreciate it.

I desperately want to keep our house (it's not just a house, it's our home), so I will continue to make the payments.

Good news is...I have a couple of email addresses at Wells Fargo and also the names of their Corporate Officers. I'm going to begin an email and phone call campaign designed to get their attention and reaffirm my mortgage at the fixed rate. I don't know if I'll be successful at all, but I figure it's worth a try, right? I'm going to pursue this until they tire of hearing from me and reaffirm just to get me off their backs. Anyone think it's worth it?

Thanks again for all your advice and suggestions!

GST

[diviaruba]

It's not enough to just sign a reaffirmation. It must also be filed with the bk court.

To reiterate...


You should certainly go ahead with your campaign to get your rate lowered, but the re-affirmation part is now off the table, post-discharge and closing. As "keepmine" points out, the time for that is past, unless you want to petition to re-open your case. You really need to find out from your attorney as to why there was no follow-up on this prior to your discharge.

[JollyGG]

To reiterate...


You should certainly go ahead with your campaign to get your rate lowered, but the re-affirmation part is now off the table, post-discharge and closing. As "keepmine" points out, the time for that is past, unless you want to petition to re-open your case. You really need to find out from your attorney as to why there was no follow-up on this prior to your discharge.

I agree.

You are trying to get them to agree to the terms in the offered reafirmation, but you are not going to get a reafirmation. And honestly it is no longer in your best interest to reafirm so is a good thing.

Be sure of your verbage so that you can get the desired response from those you are trying to contact.

[gst1980]

JollyGG and Diviaruba,

My attorney told me the reaffirmation agreement was between the creditor and me and that they could reaffirm a loan even after discharge. Is this a false statement?

Thanks,

GST

[diviaruba]

JollyGG and Diviaruba,

My attorney told me the reaffirmation agreement was between the creditor and me and that they could reaffirm a loan even after discharge. Is this a false statement?

Thanks,

GST

Yes.

Re-affirmations are legally binding agreements, executed inside of bankruptcy proceedings, and must be signed off on by your attorney or approved by a judge. If you choose to reaffirm, you agree to be legally obligated to pay the debt despite bankruptcy. If you reaffirm, the debt is not canceled by bankruptcy, and is non-dischargeable in any future bankruptcy proceedings. It is a serious business, therefore it has to be made before your bankruptcy is over, while you still have the protection of the court, as well as the ability to rescind the agreement before discharge and closing.

Any other agreement you might make with the lender, before or after discharge, in the absence of the properly signed, executed and approved re-affirmation agreement is not valid.