Questions on Reaffirming mortgage

[CreditCretin]

We have a meeting with a lawyer scheduled on Saturday, so I assume I would have more answers then, but thought I would ask here first as I am a little confused on what happens with the house/mortgage during a C7.. I originally thought we'd be going C13, but after looking at the means tests out there, it appears we may be eligible for a C7. However I do not want to lose our house, I would go C13 or trying something else before I would lose the house. A little history here, we have over 100K of credit card debt and a mortgage on the house. We originally had 20% down when we bought the house so we have a conventional 30 year fixed mortgage and are about 4 years into the mortgage. Never, ever been late on mortgage or CC for that matter, but we are living off credit cards to be able to make credit card payments. If I discharged all CC debt, mortgage and taxes would not be a problem to afford.

Anyway, in a C7, can a bank refuse to let you keep your house, even if you are current? I guess I don't understand this whole reaffirm process. I am willing to guarantee we would keep up on the house payments (is that a reaffirmal). My wife is just afraid that we will start this process and the court or the trustee will step forward and say we cannot keep the house and we will have no out at time. We no longer have equity in the house, we are right about even or maybe 10K upside down, but we plan on living in this house for 20 years and have no plans or desire to move from it.

[LuciluS]

We are filing a Chapter 7 on 9/30/09. We have paid the monthly mortgage and hubby's truck payment each month.

We bought our house 12/20/07, so we probably don't have any equity in it. When I met with our BK Attorney for the second time in Jan., he said don't worry about getting a CMA or Appraisal on your home as the Trustee knows home values are way down.

What I intend to do near the end of August is go to realtor.com & type my address in where it states 'whats your home worth'. One place you can click on the homes in your area that have sold. I'm going to average out the sq. footage to the selling price. Then take that figure and multiply it by our sq. footage. I will print this & give to Attorney when I turn in our BK papers, hopefully, on 9/2/09.

So, with that said, even tho you put 20% down on your home, there is no equity? I don't recall if you listed your Home State. We are in AR & using Federal exemptions which allows like $20,200 equity & might be doubled for a married couple. Tell your wife, as long as you make the monthly payments you will NOT lose your home.

The Bankruptcy Code of 2005 states you do not have to reaffirm your home and may do what is known as a ride through. Some state require Reaffirmations and AR may possibly be one of the States. I say that because Our Contract with BK Attorney notes 2 reaffirmations included in price.

Hoping our next home will be Heaven. We both have life insurance on the balance of the home at time of death. So we are going to reaffirm our home. Some say if they don't reaffirm the mortgage cos. are not reporting to the credit bureaus. We want our monthly payments to be reported and we also want the 'peace of mind' in reaffirming our home.

Who knows what the future will bring. I know a lot of people disagree and say do the ride through. We don't want that and nobody is going to change our mind or should fault us for wanting to reaffirm our home.

Luci

[TBLTZ]

We have a meeting with a lawyer scheduled on Saturday, so I assume I would have more answers then, but thought I would ask here first as I am a little confused on what happens with the house/mortgage during a C7.. I originally thought we'd be going C13, but after looking at the means tests out there, it appears we may be eligible for a C7. However I do not want to lose our house, I would go C13 or trying something else before I would lose the house. A little history here, we have over 100K of credit card debt and a mortgage on the house. We originally had 20% down when we bought the house so we have a conventional 30 year fixed mortgage and are about 4 years into the mortgage. Never, ever been late on mortgage or CC for that matter, but we are living off credit cards to be able to make credit card payments. If I discharged all CC debt, mortgage and taxes would not be a problem to afford.

Anyway, in a C7, can a bank refuse to let you keep your house, even if you are current? I guess I don't understand this whole reaffirm process. I am willing to guarantee we would keep up on the house payments (is that a reaffirmal). My wife is just afraid that we will start this process and the court or the trustee will step forward and say we cannot keep the house and we will have no out at time. We no longer have equity in the house, we are right about even or maybe 10K upside down, but we plan on living in this house for 20 years and have no plans or desire to move from it.

You are running into the same problem I am. Im probably gonna do a 7 but want to keep the house no matter what.

What I found out is. If you are current you should be good. The lender will 90% reaffirm the mortgage. If they don't reaffirm the mortgage as long as you are current you can stay. There is no reason why the lender would want the house. But Sometimes they don't want to reaffirm.

[CreditCretin]

That is interesting, you'd think it would be in the lender's best interest to jump on a reaffirmation if they had that option from what I am hearing. We are in Illinois. I need to check what our exemption is.

We didn't have quite 20% down when we purchased, so if the trustee checks sale records they will see we have owe about 50K less than our original mortgage. We had our previous house for sale when we bought our new house which we had built in 2005. (long story) So, when we refinanced after old house sold the equity had appraised up to 20% equity and we could skip out on the PMI. Our builder is currently selling the same model in our subdivision and our model is currently base priced almost 70K less than the base price of the house when we bought. The builder has a spec home on the market for 5K less than we currently owe on our mortgage with about the same options (maybe more) and they haven't been able to sell it for 3 months.

It sounds like we may be ok... That is reassuring. We will definately reaffirm then, if we can. Without this albatross of CC debt hanging around my neck our house is definately affordable at my income level.

[justplaintired]

We just went thru our 341 and in our papers it says we want to reaffirm but so far nothing from either 1st or 2nd mortgage. They are accepting payments and we are receiving "informational statements" from both. We can not make online payments right now, 2nd I can use billpay thru my bank, 1st I have an address for the BK dept. First mortgage said I can sign up for auto withdraw after the BK is done.

We are a C7 and have been current on our 1st and 2nd and never been late. Well we were late on 1st for the 1st time in 10 yrs, that was due to difficulty paying after we filed, I thought billpay would work, it didn't. I know now, so I will account for mailing time. Either way, both accepted our payments, cashed our checks and I assume we are fine.

Our attorney did ask at our 341 if they accepted payments, I told him yes, he said if we receive reaffirmation papers, he will let us know so we can sign.

I am now at the point, I am not sure signing those is the right thing to do. I fully intend to stay in the house. But realistically, what if my dh loses his job? What if the economy doesn't recover? What if I lose my job? We can walk right now, if we affirm, we could have more financial problems, and that is something I never want to live thru again!