Mortgage company did not reaffirm

[yeahdischarged]

Good luck regarding your mortgage reaffirmation. I hope you do not have to.

With your low payment, it sounds like you couldn't do better. But for the average person, owing what the home is worth means that if they HAD to sell, they would have to pay out of pocket for the agent fees, closing costs, etc. IF that won't work and the home goes to short sale, the bank may or may not accept the short sale. And then if it ended up in foreclosure, all that would be NEW entry and public record on your credit report, if it was reaffirmed.

What is supposed to happen is on discharge day, the filers are supposed to rejoice, it's over, time to enjoy their new debt-free life.

Oh, wait - except for the people who reaffirmed. They aren't debt-free. At all. And if they ever can't pay their car/home/whatever they reaffirmed, the bank comes after them, as if they never filed bankruptcy at all. AND that lasts for 8 years.

If there is a job loss, health crisis, etc. - tough. You have to wait 8 years.

For the average filer and particularly those upside down, the question above is excellent. What do you think reaffirming will get you that not reaffirming won't?

Good luck to all - each journey is different. But if your own lawyer is influencing you to do something that will potentially screw you in the future, it is hard to sift through all that and protect yourself. Can you imagine all the people who never see websites like this one? Scary.

Oh, and MIbankrupcy, you are VERY lucky if you are able to exempt your tax return. The fact that you have that much money coming back probably means you withheld "too much" per month and many trustee's demand folks hand it over. (Not always the case, but often.) The trustee says "Hey, if you hadn't withheld so much, you would have money left over each month. Hand it over AND let's talk chapter 13." Sometimes it's not pretty. Part of our bankruptcy planning was to adjust our withholding properly to not have any extra, yet not owe either.

[danaf]

[yeahdischarged]

Hi Dana, we went to husband's employer credit union, were loaning way under value, put $4500 down, and agreed to auto-debit for payment. But I was STILL shocked!! They were happy to give us that rate, and didn't seem to understand why we were shocked. Prior to that, we had gotten 3 or 4 credit cards, I think, but that was it for rebuilding. The car loan was right around 1.5 year after bankruptcy. The fact that our home was being foreclosed wasn't even on the radar because the CR couldn't report it legally. We legally owed nothing on the home, but had continued to make payments until we realized we were transferred, moving and the home was upside down.

My career prior to this health crud was real estate. I am very familiar with listings, selling, short sales, foreclosures, etc. Trust me - banks don't come after houses that are performing loans, whether there is equity or not. Never heard of it. I think it would be great if someone WOULD post if the bank came after their asset while current on payments. I don't think it is common at all, especially nowadays. We were willing to risk it rather than sabotage our futures when bankruptcy tried to clear our slate. Personal choice, I suppose.

You are so right - your credit will rebuild easily. Just clean it up using other info (make sure everything is reporting correctly as IIB with a zero balance), get some credit cards, and then a car loan if possible. We are now more than 2 years after discharge and doing wonderfully. Seems like a distant memory, even though it was such an emotional nightmare for me personally. lol

[TEW]

1.I do not believe a judge would sign a judgment for foreclosure if the loan is being paid.
2. The Mortgage company/bank got the money for the loan from an underwriter the underwriter got the money from an investor.
I don't think anyone in this chain gives a darn if i filed BK as long as they are getting the money......

[yeahdischarged]

1.I do not believe a judge would sign a judgment for foreclosure if the loan is being paid.
2. The Mortgage company/bank got the money for the loan from an underwriter the underwriter got the money from an investor.
I don't think anyone in this chain gives a darn if i filed BK as long as they are getting the money......

Amen!

[hopejones]

Only thing scared about all this is that I am living in a home and they could come in and literally kick my family out with no reason whatsoever. Despite I show payments are made monthly, I feel like they have the upper hand and can come in and give me the boot.

Is that true? If we don't reaffirm our mortgage, legally can we be kicked out of the house at any time? We were hoping/planning on NOT reaffirming & just paying on the house for the next 15 years till it was paid off. I am really scared now.

[laurannm]

Is that true? If we don't reaffirm our mortgage, legally can we be kicked out of the house at any time? We were hoping/planning on NOT reaffirming & just paying on the house for the next 15 years till it was paid off. I am really scared now.

I wouldn't worry about it. You are still protected by state laws and as long as you remain current, the lender cannot take your house now or in the future.

[deadbroke99]

What happens after 10 years when the bankruptcy is removed from your credit report. If the mortgage says included in bankruptcy that means it stays on there forever?

[john_smith]

I don't get it

I don't get it. If I do not reaffirm my mortgages will not there be still a lien on my house if I decide to sell it one day? Will I be able to deduct the interest from my taxes every year? If I do not reaffirm is there at all any loan anymore?

My numbers:
First - 190K
Second - 47K
Credit Cards - 25K
House Value - 180K. No non-exempt assets.

But if I rent, the rent will be > my first mortgage payment now. I am below the median. I was thinking about 36 months chapter 13 with second mortgage lien strip, but now I think chapter 7 with no reaffirming may work better.

What do you think?

Thanks

[aces67]

I don't get it. If I do not reaffirm my mortgages will not there be still a lien on my house if I decide to sell it one day? Will I be able to deduct the interest from my taxes every year? If I do not reaffirm is there at all any loan anymore?

My numbers:
First - 190K
Second - 47K
Credit Cards - 25K
House Value - 180K. No non-exempt assets.

But if I rent, the rent will be > my first mortgage payment now. I am below the median. I was thinking about 36 months chapter 13 with second mortgage lien strip, but now I think chapter 7 with no reaffirming may work better.





What do you think?

Thanks

If you don't reaffirm then you just keep paying the mortgage every month like normal. It will still pay off just the same.

[Bandit]

TEW - thats my point exactly. Because the credit reports show the mortgage was "Included in BK" there is absolutely no record showing I have been making payments ontime every month. This goes for my Toyota loan as well.

Long story short - am just trying to show proof that the mortgage & auto loans have been paid ontime.

I am not sure how credit reports are weighted. I am afraid my credit numbers will not go up because there is no proof of payment. Then again, having these two big loans showing $0 balance indeeds helps my Debt to Income ratio.

I see other people on this forum heading for the same mistakes and they are acting like bad credit or not having your payments shown in good favor is no big deal, when they will find out soon enough that it IS a big deal. I doubt your toyota loan will ever budge on that.

[Bandit]

It would be interesting to hear what others on this very old thread are saying about it, 6 months later.

[car67]

I wonder right after you file Chapt 7 and its time for the mortgage company to offer the reaffirm wouldnt this be a great time to ask the mortgage company for a loand modification IE lower rate or reduction in principle for the reaffirm!

[Bandit]

I wonder right after you file Chapt 7 and its time for the mortgage company to offer the reaffirm wouldnt this be a great time to ask the mortgage company for a loand modification IE lower rate or reduction in principle for the reaffirm!

especially if it is the home of your dreams and you planned on retiring there

[Keebler]

Is that true? If we don't reaffirm our mortgage, legally can we be kicked out of the house at any time? We were hoping/planning on NOT reaffirming & just paying on the house for the next 15 years till it was paid off. I am really scared now.

By not reaffirming you should think of it this way...

You still have a mortgage and it's still legally binding on your part as it is to the bank.

The terms are still the same, the payments are still due and it's still a contract between you and the bank.

As before the bankruptcy, the bank only has a legal right to evict and/or foreclose if you fail to meet the terms of the contract.

Everything stays the same as it was before bankruptcy except for your liability for defaulting.

In this regard, your mortgage is in limbo. The bank can't do anything until you default on your loan so your job is to NEVER default.

If you do, the bankruptcy has already decided that the bank has no grounds to go after you if it loses money.