To reaffirm home or Not reaffirm Mortgage

[Mi Bankruptcy]

I meet with my Attorney this afternoon to actually pay the 299.00 to file.

I have been considering not reaffirming my home for the following reasons.

I am the sole provider for my family. If something happens to me I don't want my wife burdened with the debt if she had to move out of the house for foreclosure. I have never missed or been late on a payment for our home.

However, I am the only person on the loan. I also don't like that I have a high interest rate 7.5% and I might reconsider reaffirming if the lowered the rate and/or took off the MIP.

I am reaffirming two vehicles since I owe what they are worth and should be able to pay one off with our tax return in 2009. I have read plenty about reaffirming cars but not much about reaffirming homes. Our mortgage is through Wells Fargo. I definitely owe what my house is worth with some equity.

Any thoughts?

[HHM]

Frankly, there is no reason to reaffirm anything; cars, houses, consumer goods; no reason whatsoever.

[TEW]

Mi
It looks like you have given all of this a lot of thought. When I made my dissuasions I think what really helped me was the, if something happens to me thing. I didn’t take long looking at the numbers I had in front of me to see that my wife would be devastated financially on top of everything else. I think that is where the business part touches the family emotional part Bottom line you do what’s best for you and your family.

[TEW]

dup post how does this happen.

[Mi Bankruptcy]

What I don't understand is the ramifications or possible concenquences that could derive from not reaffirming more concern for the homes rather than the house. I originally told my attorney I intended to reaffirm my cars and homes. Additionally, is the Trustee concerned that I am reaffirming.

For instance we know mortgages don't want homes. However, my house is continuing to appreciate. My taxes & insurance is in escrow. I assume if I don't reaffirm this will be affected?? True? not true?

[b_girl]

We did have to reaffirm our mortgage and HELOC if we wanted to keep our home...our attorney informed us that ride throughs on mortgages just won't work in our area. I tend to believe him, because our lender was all too eager to get their hands on our home (they filed a motion of abandonment with the court while we were still in our 60 days AND still in our home--not sure why). If you don't mind possibly having to rent if they do make you leave, don't reaffirm--but many here report successful mortgage ride throughs. As for reaffirming cars, I wouldn't at all. Ride throughs are usually successful on cars unless you happen to have Ford or GM (or a credit union) as lenders, then they tend to be pretty heavy handed.

[Mi Bankruptcy]

I guess that is what I am concerned about. If you don't reaffirm they could kick you out? Does not reaffirming a mortgage give power to the Wells Fargo to foreclose on my home at anytime even though I have never been late or missed a house payment? Additionally, if I stay in my home for another 15 years and want to sell even though I owe money.. Is it my home to sell because I did not reaffirm the mortgage?

[AngelinaCatHub]

What I don't understand is the ramifications or possible concenquences that could derive from not reaffirming more concern for the homes rather than the house. I originally told my attorney I intended to reaffirm my cars and homes. Additionally, is the Trustee concerned that I am reaffirming.

For instance we know mortgages don't want homes. However, my house is continuing to appreciate. My taxes & insurance is in escrow. I assume if I don't reaffirm this will be affected?? True? not true?

Nobody wants your house or cars, they want your money. Pay through is safer and as long as you keep those payment current, no mortgage company will take them away or forclose. If they do, they just have another "white elephant" that needs to be watched and protected from looters.

If you pay through the advantage is, if something in the future happens, you can let the items go without a Judgment. 'Hub

[AngelinaCatHub]

I guess that is what I am concerned about. If you don't reaffirm they could kick you out? Does not reaffirming a mortgage give power to the Wells Fargo to foreclose on my home at anytime even though I have never been late or missed a house payment? Additionally, if I stay in my home for another 15 years and want to sell even though I owe money.. Is it my home to sell because I did not reaffirm the mortgage?

[Mi Bankruptcy]

Yes, that makes sense.. However, I am concerned that if I don't reaffirm the mortgage then the contract is void because I included them in bankruptcy even though I plan on keeping the home. Again my whole point is.. If the day after my bankruptcy ends I get in a car accident and die my wife is not stuck with the debt because she has to wait 7 years to file again.

The base question.. If I don't reaffirm during bankruptcy is it possible for them to take the home? I know it's unlikely since we are making payments on time and have never missed a payment.

[PoorGrammyinBK7]

We did not reaffirm anything. My attorney said it may be possible for them to try and take the house if ultimately we should get behind in payment - but he doubted they would do so as long as you are current. He said in 25 years he has always recommended not reaffirming and in none of his cases has a lender tried to take the house from the owner as long as they are paying and on time with payments.

Now we are discharged so I guess we will see! Nothing so far though....

The cars may be another story, because the law does say you have to reaffirm or surrender or redeem when it comes to "personal property". But I really don't see how it would be advantageous to the lender to repo these 2 cars when we are, and always have been, current -- and it is very unlikely that they could get anywhere close to what we owe on them in an auction format.

[b_girl]

Yes, Mi, they could come after the house, and it seems to depend on your area. That's where you need to check with your lawyer as to what is prevalent in your area. I was all gung ho to not reaffirm our home, based upon what I'd read here, but our attorney warned us that it would not work in our area and I believed him...as it turns out, I think he was absolutely right, based on the subsequent actions of our lender. Do I worry about re-affirming? Course I do...my husband is the bread winner and if anything were to happen to him in the next few years, I would be screwed. However, if he dies, I'm covered because he has a sufficient life insurance policy to cover the mortgage. If he's disabled, well, his work offers disability insurance and we are investigating adding this to his benefit package.

By the way, I wanted to rent, but my husband absolutely refused to do so...he is firmly in the 'own your own home' camp. I finally agreed with him because 1)we owe what our home is worth and 2) our payments are really really low ($288/mth). If you owe more than your house is worth and the payments are a burden, I would not reaffirm and would let it ride IF your attorney indicates that it is a commonly allowed practice in your area. Remember, ride throughs are not the law...it was wiped out in the 2005 BK redo...but many are still successfully exercising this option.

[HHM]

The key is, you have time. You can reaffirm at any point before discharge.

If it were me, I would wait and see if the lender does anything. If they file a motion in your BK, THEN you can reaffirm. No need for you to make the first move.

If the lender does not file anything in the BK, and you get your discharge, the lender cannot foreclose based solely on the fact that you failed to reaffirm. (just keep making your monthly payments on time and in full).

[b_girl]

I agree. Despite our attorney's advice we still waited to reaffirm our home because I was firmly in the ride through camp. The lender filed a motion about 30 days after the 341, so we knew they were going to be aggressive.

[lillaimof2kids]

Our 2nd Mortgage lender wanted us to reaffirm. Our attorney tried to tell us we HAD to sign or they would foreclose on us...I refused. For me, it was the dumbest thing I'd ever heard of...it made no sense.