Reaffirm at Lower Payment Do we have to Revise?

[WayTooMuchDebt]

Already had 341 - UST was at 341 (Income over median) and asked questions. Stated they will not take further action

Started reaffirmation process. Second Mortgage is willing to reduce interest rate on interest only loan which would lower my payment by about $500/mo since it is interest only right now. If we keep making the same payment we stated on means and schedule J we could actually pay it off in 15 years instead of only paying interest.

We currently show negative income on I/J but if we had to restate for new interest only payment it would put us positive around $200.

I have asked my lawyer but did not hear back yet.

Would we have to revise our schedules to show the reaffirmed payment amount? I ask because I am still scared of getting pushed into a 13 since the UST was already involved.

[danaf]

I've never had a home so forgive me if this sounds stupid - but it's the first loan the one that matters? Don't they have first lien on your home? Can one reaff the first and not the second?

But to the point of your question - if it changes your schedules to push you into 13 then why not wait until after the bk and refi?

I have very little experience with home loans but I do know that if it changes your schedules in an adverse way then how can it be smart to do? Plus - the judges have to approve all reaffirmation and the majority of them won't because they feel it puts an undue hardship on the peitioner.

Hopefully your attorney will respond back to your questions.

[WayTooMuchDebt]

I can not refinance as we owe more then it is worth (and I know the comments will come we should not reaffirm if we owe more but we want to stay here). The reason I would want to reaffirm is we could make the payment we had intended to but actually pay some principal instead of interest only.

If I do not reaffirm the new rate I will be stuck with 10% on my second mortgage and will not be able to pay any principal.

I plan to also reaffirm my first as I have a good rate on that one.

My main concern is if it will change my schedules. I just took a chance and called to ask the mtg company to fix and lower the rate not thinking they would (and even drop to 5.25%) and clearly did not think about the impact on my statements, I honestly did not want to sign a reaffirmation at 10.1 % but my lawyer was pushing me to so I wanted to see if I could at least lower the rate a little before signing. Who knew they would!! So I was excited for about an hour and then realized it may cause issues!

[TEW]

I can not refinance as we owe more then it is worth (and I know the comments will come we should not reaffirm if we owe more but we want to stay here). The reason I would want to reaffirm is we could make the payment we had intended to but actually pay some principal instead of interest only.

If I do not reaffirm the new rate I will be stuck with 10% on my second mortgage and will not be able to pay any principal.

I plan to also reaffirm my first as I have a good rate on that one.

My main concern is if it will change my schedules. I just took a chance and called to ask the mtg company to fix and lower the rate not thinking they would (and even drop to 5.25%) and clearly did not think about the impact on my statements, I honestly did not want to sign a reaffirmation at 10.1 % but my lawyer was pushing me to so I wanted to see if I could at least lower the rate a little before signing. Who knew they would!! So I was excited for about an hour and then realized it may cause issues!

just pay don't reaffirm. I don't get why your lawyer is pushing this. it's a bad move in this market.

[JRScott]

I would make sure the first mortgage will reaffirm before signing the reaffirmation for the second mortgage. If the first refuses to sign a reaffirmation I would not reaffirm the second at all.

As you say this is not a typical move, and in most cases it is better not to reaffirm. If your sure you'll be there for 15 or more years this might be good for you in your circumstance, but do not sign the second until you have seen the first one.

The filing is your expenses to that point. I do not think you'd have to readjust if they reaffirm for lower amount. However it is something you should ask your lawyer to be sure that is legal.

[Help!]

just pay don't reaffirm. I don't get why your lawyer is pushing this. it's a bad move in this market.

I agree. If you owe more than it's worth, why would you reaffirm and emerge from BK upside down in your home? Take full advantage of the fresh start.

[StartingOver08]

Check the true value of your home right now. Not the value it was 6 months ago. A right now value is considered a comparable sale within the last 90 days at most. A quick sale value. Check to see how upside down you really are right now.

Check also the trend - you may in fact be more upside down in the next 12 to 24 months. IF you decide to keep your home, under no circumstances sign a reaffirmation with a second UNLESS you already have the reaffirmation on the first (hopefully at a lower interest rate and reduced balance). If you are underwater by 15% or more - why would you reaffirm?