Mortgage company did not reaffirm

[gophermn]

So I find out today that Homecomings Finl did not reaffirm my house. As you see below I was dicharged May 2008 and since day one of filing I made payments (ON TIME) to Homecomings. I now find that they are listing my mortgage as "Included in Bankruptcy" and said they sent out reaffirmation papers is April 2008. I did not get them.

I just talked with the BK dept of Homecomings and the acct is listed as zero on my credit report. I then asked if I decided to stop making payments and the house went into foreclusure, if that would show on my credit report. They said no because once they list the mortgage in BK, they can not list anything more on the account.

WHAT A MESS!! All I want is to show I have been making monthly payments to the mortgage and my credit score to be reflected accurately.

Lesson to those going through Reaffirmation. MAKE SURE YOU GET THE PAPERS - DON'T ASSUME LIKE I DID!!

[TEW]

Why reaffirm for your credit report?

[2Bshinyandnew]

Why reaffirm for your credit report?

Hopefully the OP will come back and say why they wanted that reaffirmation in their individual circumstances, but there are circumstances where a reaffirmation is beneficial. In my situation...I have a great fixed rate mortgage on my house that originated in 2003. I have 100% exempt equity in the house and once I file I plan on staying and continuing to pay my mortgage, status quo. If I'm going to keep on paying and have equity, I want those timely payments reflected on my credit report. Why wouldn't I want to reaffirm under those circumstances?

[Keebler]

Hopefully the OP will come back and say why they wanted that reaffirmation in their individual circumstances, but there are circumstances where a reaffirmation is beneficial. In my situation...I have a great fixed rate mortgage on my house that originated in 2003. I have 100% exempt equity in the house and once I file I plan on staying and continuing to pay my mortgage, status quo. If I'm going to keep on paying and have equity, I want those timely payments reflected on my credit report. Why wouldn't I want to reaffirm under those circumstances?

I was willing to reaffirm my mortgage for similar reasons and I signed the reaffirmation agreement.

Because I was upside down on my monthly expenses and the attorney failed to take action to avoid it, a hearing was held to rule on the mortgage being an undue hardship.

The judge gave a long lecture on how none of these should ever be reaffirmed and ruled it a hardship.

[TEW]

Well reaffirmation gives no guarantee that the bank will even report the payments on your credit report.
What does reaffirmation have to do with any of the examples you have give. Your equity is not going ot change your exemptions? nope they are not going to change
Stay in the house keep paying but don't reaffirm
how does reaffirmation help you? I have yet to see a post here where someone came back and said I reaffirmed a loan and boy am i glad I did.

[2Bshinyandnew]

Well reaffirmation gives no guarantee that the bank will even report the payments on your credit report.
What does reaffirmation have to do with any of the examples you have give. Your equity is not going ot change your exemptions? nope they are not going to change
Stay in the house keep paying but don't reaffirm
how does reaffirmation help you? I have yet to see a post here where someone came back and said I reaffirmed a loan and boy am i glad I did.

If I don't reaffirm, the bank definitely won't report timely payments to the credit bureaus. If I do reaffirm, they may. What have I got to lose? I owe 1/2 what the house is worth. Why would I not want to at least try and get credit for my timely payments? Of course the equity won't change the exemptions for my state, my example was to illustrate that if someone does have equity, particularly significant equity (greater than 50% of the homes value in today's market), and a good mortgage, why not get credit for timely payments if it is possible to do so?

[gophermn]

Well reaffirmation gives no guarantee that the bank will even report the payments on your credit report.
What does reaffirmation have to do with any of the examples you have give. Your equity is not going ot change your exemptions? nope they are not going to change
Stay in the house keep paying but don't reaffirm
how does reaffirmation help you? I have yet to see a post here where someone came back and said I reaffirmed a loan and boy am i glad I did.

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.

[TEW]

Your credit score is the worst reason to reaffirm. Your credit will come back over time.
For the next 8 years you have absolutely no protection if something happens to you financially, you lose your jobs you get sick. If you reaffirm you put yourself in far worst position then you were before you filed BK.
Why is your credit score so important that you would put yourself in position that would have no way out.

[Bell30656]

After your bankruptcy is discharged and closed you could approach your lender about a refi that would benefit everyone. You would benefit because you would have a new home loan on your credit report. They would benefit because they would have a loan that could not be discharged in bankruptcy for 7+ years. Besides terms are becoming more and more favorable.

[WharffRat]

I did not reaffirm my mortgage. I still make my payments on time. I called my mortgage broker and asked about a refi. She said to wait until 2 years after discharge and then we can apply for an FHA refi. She could tell that my payments were made on time because of the account records, not the credit report.

My wife was concerned about it not building up our credit score. Which is currently 552/553 for us. But, I tell her not to worry about the credit score. Then she is worried that Wells Fargo will want the house and take it from us, since it was included in the BK. I cannot see that happening in this Real Estate market. She feels better about the situation.

[2Bshinyandnew]

Your credit score is the worst reason to reaffirm. Your credit will come back over time.
For the next 8 years you have absolutely no protection if something happens to you financially, you lose your jobs you get sick. If you reaffirm you put yourself in far worst position then you were before you filed BK.
Why is your credit score so important that you would put yourself in position that would have no way out.

Say I don't reaffirm my mortgage, the balance of which is $138K. The current market value is ROUGHLY $260K-$300K, I live in a PUD, so the very recent comps are a pretty accurate reflection of the current value. Say in two years post discharge the worst happens and I can no longer pay my mortgage. What happens to the equity? Do I lose it since I didn't reaffirm? If I don't reaffirm is it still "my house"? Do I lose control over deciding how/when/where to try and sell the house? There is a lot of equity there to consider. It seems like not reaffirming would create a title/deed nightmare when I do go to sell.

Why have all 3 of the bankruptcy lawyers I consulted said I should reaffirm since I have considerable equity?

****to the OP...sorry for hijacking your thread!!*****

[yeahdischarged]

If you do not reaffirm (our lender refused, trust me we tried), you will lose no ability to sell your home. You can sell at any time, as you still have the loan in your name, just no legal obligation to pay it if something happens in your life that makes it impossible (like happened to us).

We planned to keep our home forever but were happy not to reaffirm in the end. The market crashed in our area, hubby got transferred, the home was upside down at that point, and we were able to call the bank and hand back the keys, basically. The credit report still said "IIB with zero balance". I have heard of so many people who did NOT get reporting on the credit even with reaffirmation.

When the bank then foreclosed on our home (1.5 years after ch. 7 discharge), it did not change anything on our credit report. Still just IIB. And had we not moved, we could have lived payment-free for 8 months before the bank took the home. It is STILL on the market, now $50,000 less than we paid for it in 2005.

Had we been reaffirmed, we would have exactly had an albatross around our neck. After suffering the emotional and physical stress of a chapter 7 BK, and then to continue to owe on a debt that WOULD have been allowed discharged? I was one hysterical mess, I'll admit, but in the end our lawyer was right - no reaffirmations were our best bet. You just never know what the future holds - we never thought we'd end up in that position at all. And as long as we had made those payment for 1.5 years, the bank didn't bother us a peep. They were THRILLED we were making payments. They did NOT want out home! lol

Our scores are now mid-600's and rising. We had excellent credit prior to filing and were forced to file due to job loss and health crises. It has shocked us how easy it has been to rebuild our credit, including getting a car loan for 5.75% not 2 years out! (Done for rebuilding purposes only - we are a cash - only family now.)

IMO, people who make it out of their discharges NOT reaffirmed (even if they tried really hard to get reaffirmed) are BLESSED individuals. Take that fresh start and bloom!

Good luck.

[Kansas1960]

OK..let me get this straight. If I file Chapter 7 I do not want to reaffirm the debt even if I want to stay in the home and have exempt equity in the home? Will it be my decision to do this? What if they want me to and I don't do it, can they take the house away and sell it cheap and then I loose my equity?

[Gabriel_S]

IMO, people who make it out of their discharges NOT reaffirmed (even if they tried really hard to get reaffirmed) are BLESSED individuals. Take that fresh start and bloom!

Good luck.

Hmmm..interesting topic. I've always been under the belief that to keep your home after discharge you need to reaffirm. Am I wrong in this assumption? I really want to keep my home and car, after all it is MY HOME. Is it really possible to keep your home without reaffirming it yet not be responsible financially in case of unforeseen circumstances?

[gophermn]

yeadischarged and everyone else, so it sounds like I am better off where I am today. Keep paying on a home (some call it Pay and Retain) and not worry so much about reaffirmations. Because as yeadischarged mentioned, I could just walk away from the home and not get dinged twice (i.e. IIB and Foreclosure). Legally I know once they include the home in BK they can not contact or add anything to the credit agencies.

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.
Suppose I will do what wharffrat said and stick it out for another 16 months and refi.

Thanks all!