To reaffirm home or Not reaffirm Mortgage

[happy_ira]

reaffirmation hearing?

Here's a follow-up question:

Let's assume that the mortgage company is very aggressive about "signing a reaffirmation" (or something like that), and one decides to do so. If the ONLY thing one is reaffirming is a real property (i.e., mortgage) loan, does this require going before a judge and being questions/certain that it is not an "undue hardship"?

Reason I ask is because in my situation, I do NOT want to drudge up everythign since I've managed to get both the Bankruptcy Trustee and the US Trustee to drop the case and they are no longer interested. However, I do intend to keep my home and keep making payments. BUT if the mortgage company becomes aggressive about my signing the reaffirmation (or else!!), then will this somehow get "re-opened" at a reaffirmation hearing with a judge prior to the actual discharge?

Anyone know what occurs in such an instance?

Thanks.

[happy_ira]

bump... for my question above on info on a reaffirmation hearing??

[happy_ira]

Anyone??

[laurannm]

Not speaking from experience but only from what I have read...

The reaffirm agreement must be signed not only by you and the creditor, but your lawyer must also sign and certify that it is not an undo hardship. If you are showing negative on your schedules and you are trying to reaffirm, a judge MAY decide to schedule a hearing, in which case you would have to explain why this is not a hardship.

Even if a hearing was scheduled, it doesn't mean that the UST will take a renewed interest in your case.

[Keebler]

Not speaking from experience but only from what I have read...

The reaffirm agreement must be signed not only by you and the creditor, but your lawyer must also sign and certify that it is not an undo hardship. If you are showing negative on your schedules and you are trying to reaffirm, a judge MAY decide to schedule a hearing, in which case you would have to explain why this is not a hardship.

Even if a hearing was scheduled, it doesn't mean that the UST will take a renewed interest in your case.

EXACTLY!

My hearing is scheduled for tomorrow morning regarding the presumption of hardship.

[happy_ira]

EXACTLY!

My hearing is scheduled for tomorrow morning regarding the presumption of hardship.

Keebler - how did it go? What was asked?

[Keebler]

Keebler - how did it go? What was asked?

Just got home and I need to head of to work.

The whole hearing was surreal. We got there with ten minutes to spare and my attorney barely said anything to me. (I wasn't too interested in small talk either.) We then sat and waited while a few attornies shot the breeze.

The people before me reaffirmed an engagement ring they bought under their name for a Brother-in-law.

We were the last ones to get called before lunch and the judge was in the mood to be long winded. I litterally said nothing and stood there as he delivered a sermon on how reaffirmation should never be allowed and he's against it. My attorney chimed in saying "I don't even know why I should bother filling out these things" as she motioned toward the paperwork.

He went on and on and on about the economy and how more companies will be failing and how nobody is safe. His whole point was how he's somehow giving me a fantastic gift by NOT letting me reaffirm.

At one point in his sermon he asked hypothetically if I really wanted to reaffirm and I just shrugged my shoulders while my wife and attorney were shaking thier heads "no". I really wanted to argue my reasons for reaffirming but I decided it wasn't worth it.

So, we'll keep making payments and keep living here for as long as we'd like.

My bet is that some day in the future something will happen, like trying to sell the place, and we'll find that the lack of a mortgage will cause us some different kind of trouble instead. But, we'll just have to deal with that when it happens.

[learnmore]

Everyone who says there's no reason to reaffirm...

I filed chapter 7 yesterday pro se and plan on fighting to the teeth to have my mortgage reaffirmed. It just doesn't make any sense to not have some sort of legal agreement in place when sending money month after month. Without a mortgage agreement, what obligation does the lender have to apply your payments to the principle? They could arbitrarily create fees that consume your entire monthly payment and you would have no legal recourse! Furthermore, I am within striking distance of 20% equity. Under my current mortgage agreement, I have a right to be freed from private mortgage insurance (PMI) at 20% equity, but with no reaffirmation there is no agreement. The lender can decide that I must pay PMI indefinitely and set any price they want. Without a legal reaffirmation, I could end up "owing" more on my home 5 years from now than currently. Without the legally binding protection of a mortgage, I might as well just give the bank my home.

[Mi Bankruptcy]

I filed chapter 7 yesterday pro se and plan on fighting to the teeth to have my mortgage reaffirmed. It just doesn't make any sense to not have some sort of legal agreement in place when sending money month after month. Without a mortgage agreement, what obligation does the lender have to apply your payments to the principle? They could arbitrarily create fees that consume your entire monthly payment and you would have no legal recourse! Furthermore, I am within striking distance of 20% equity. Under my current mortgage agreement, I have a right to be freed from private mortgage insurance (PMI) at 20% equity, but with no reaffirmation there is no agreement. The lender can decide that I must pay PMI indefinitely and set any price they want. Without a legal reaffirmation, I could end up "owing" more on my home 5 years from now than currently. Without the legally binding protection of a mortgage, I might as well just give the bank my home.

I thought PMI( primary mortgage insurance) was regulated under the terms of FHA. If so, I don't think it this would be possible. I would like to hear how you came to this conclusion about PMI. I understand what your saying and it makes sense to me in the general idea of signing. If would please share with us how you came to the fees.. and PMI concerns.. Thanks. MI

[laurannm]

I filed chapter 7 yesterday pro se and plan on fighting to the teeth to have my mortgage reaffirmed. It just doesn't make any sense to not have some sort of legal agreement in place when sending money month after month. Without a mortgage agreement, what obligation does the lender have to apply your payments to the principle? They could arbitrarily create fees that consume your entire monthly payment and you would have no legal recourse! Furthermore, I am within striking distance of 20% equity. Under my current mortgage agreement, I have a right to be freed from private mortgage insurance (PMI) at 20% equity, but with no reaffirmation there is no agreement. The lender can decide that I must pay PMI indefinitely and set any price they want. Without a legal reaffirmation, I could end up "owing" more on my home 5 years from now than currently. Without the legally binding protection of a mortgage, I might as well just give the bank my home.

Hold on....I believe this is completely incorrect. If you do not reaffirm, it is true, your personal liability is discharged. However, the terms of your mortgage (i.e. the note and everything in it..interest rate, escrow, and all other terms) still survive the BK and thus remain legally binding.

Also, if I am not mistaken, PMI is governed by law and not by your mortgage agreement with the lender. Thus choosing to not reaffirm has no bearing on PMI

[happy_ira]

Furthermore, I am within striking distance of 20% equity.

I am assume you are taking Homestead exemption? If you are sitting on 20% equity (and if that is a huge number), unless exempted, I believe the Trustee will happily take a keen interest in this... Couldnt he force a HELOC (or such) to pay off other creditors?

[TEW]

I thought PMI( primary mortgage insurance) was regulated under the terms of FHA. If so, I don't think it this would be possible. I would like to hear how you came to this conclusion about PMI. I understand what your saying and it makes sense to me in the general idea of signing. If would please share with us how you came to the fees.. and PMI concerns.. Thanks. MI

If I am reading what you posted correctly you have an asset case and the trustee is going to give you the $3500 for the exemption. What are you reaffirming?

[TEW]

Just got home and I need to head of to work.

The whole hearing was surreal. We got there with ten minutes to spare and my attorney barely said anything to me. (I wasn't too interested in small talk either.) We then sat and waited while a few attornies shot the breeze.

The people before me reaffirmed an engagement ring they bought under their name for a Brother-in-law.

We were the last ones to get called before lunch and the judge was in the mood to be long winded. I litterally said nothing and stood there as he delivered a sermon on how reaffirmation should never be allowed and he's against it. My attorney chimed in saying "I don't even know why I should bother filling out these things" as she motioned toward the paperwork.

He went on and on and on about the economy and how more companies will be failing and how nobody is safe. His whole point was how he's somehow giving me a fantastic gift by NOT letting me reaffirm.

At one point in his sermon he asked hypothetically if I really wanted to reaffirm and I just shrugged my shoulders while my wife and attorney were shaking thier heads "no". I really wanted to argue my reasons for reaffirming but I decided it wasn't worth it.

So, we'll keep making payments and keep living here for as long as we'd like.

My bet is that some day in the future something will happen, like trying to sell the place, and we'll find that the lack of a mortgage will cause us some different kind of trouble instead. But, we'll just have to deal with that when it happens.

Keebler
You got new wheels NICE your hearing went well LOL

[Keebler]

Keebler
You got new wheels NICE your hearing went well LOL

Wow! Thanks for noticing the new picture.

We are SO LUCKY and blessed that I can't even describe it all. We're litterally going to be debt free because we're not keeping ANY vehicles and the mortgage was not reaffirmed.

I'm not without obligation because I got a long-term loan from my Sister and I scored a newer Suburban than the one that I'll surrender and it's going to cost me almost the same amount.

I got this one-owner Suburban for HALF of what retail price should have been and it's perfect for our needs. (It's a 2003 with 117,000 Miles for $5,400) It's kind of dirty inside, and there's no shortage of minor things that haven't been taken care of, but I'll have it all fixed up in no time and we'll be doing fine.

I'll proceed on faith that not reaffirming was the right thing to do despite the fact that it seemed like the wrong thing in my case.

I tried to get transcripts of my hearing to share but they charge a fortune for them. The cheapest thing I could do is get an audio CD for $26 and find a way to host it on the Internet. I'm not sure anyone would learn enough from it beyond the value of entertainment so I probably won't bother.

[laurannm]

Wow! Thanks for noticing the new picture.

We are SO LUCKY and blessed that I can't even describe it all. We're litterally going to be debt free because we're not keeping ANY vehicles and the mortgage was not reaffirmed.

I'm not without obligation because I got a long-term loan from my Sister and I scored a newer Suburban than the one that I'll surrender and it's going to cost me almost the same amount.

I got this one-owner Suburban for HALF of what retail price should have been and it's perfect for our needs. (It's a 2003 with 117,000 Miles for $5,400) It's kind of dirty inside, and there's no shortage of minor things that haven't been taken care of, but I'll have it all fixed up in no time and we'll be doing fine.

I'll proceed on faith that not reaffirming was the right thing to do despite the fact that it seemed like the wrong thing in my case.

I tried to get transcripts of my hearing to share but they charge a fortune for them. The cheapest thing I could do is get an audio CD for $26 and find a way to host it on the Internet. I'm not sure anyone would learn enough from it beyond the value of entertainment so I probably won't bother.

I honestly would not be worried about not reaffirming. Again, your "mortgage" or lien still exists, regardless if you affirm or not. If you decided to sell or refinance, you should not have any problems.

The only potential issue is the fact that the lender will not report your payments to the credit bureaus. So when it comes time to refinance or sell (if you ever decide to), you may have to request payment history from your current lender in order to show that you have been making on-time payments.