chapter 7 filing and reaffirm house loan

[glc4122]

yes, i have a question dealing with a mortgage. in a chapter 7 filing if the mortgage company will not reaffirm the mortgage what happens? my mortgage company is countrywide(bank of america). can the mortgage holder foreclose?

[lrprn]

yes, i have a question dealing with a mortgage. in a chapter 7 filing if the mortgage company will not reaffirm the mortgage what happens? my mortgage company is countrywide(bank of america). can the mortgage holder foreclose?

If you or your lawyer offers BofA a reaffirmation agreement and they refuse to sign it, then there's nothing you or your lawyer can do to force that to happen.

As long as you always make on-time mortgage payments after discharge and closing, BofA has no legal grounds to foreclose on your home. However, slip once and send a late payment, that could open the door. Now whether BofA will step through the door and start foreclosure proceedings for one late payment, who knows?

Bottom line is that most bk lawyers still recommend not signing reaffirmations unless there are specific circumstances in your case that require you to do so. Not signing the reaffirmation will allow you to walk away from the homes' mortgage(s) if something unexpected happens (job loss, divorce, severe medical problems, etc) and you can't make the mortgage payments any longer.

If you filed with a lawyer, what does he/she have to say about this situation?

[joh]

I was just discharged and never got a reaffirmation agreement from the bank. The
bank has acted like there was never a bk filed. I get statements for both 1st and 2nd are being reported current. I get all their offers for this and that. I called once
about what was late and was told after the 15th. I pay at the being of the month.
I would have signed a reaffirmation agreement if I had gotten but now it to late do anything I think.

[lrprn]

I was just discharged and never got a reaffirmation agreement from the bank. .... I would have signed a reaffirmation agreement if I had gotten but now it to late do anything I think.

Yes, if you are certain that you didn't sign a reaffirmation document and you are discharged, you're right - it's too late to do anything now.

Just keep making your mortgage payments on time. That way you don't open the door to a possible foreclosure. And now you also have the advantage that if something unexpectedly bad happens financially, you can walk away from the house owing nothing.

[justplaintired]

We offered to sign reaffirmation agreements with both 1st and 2nd, so far nothing has been sent. We don't know if they will. Our attorney didn't want us to sign reaffirmation papers when we first met with him, and I couldn't understand that. Now I do a little better. We have never been late on our house on either 1st or 2nd. I am still a little nervous if we don't sign, but from all the reading I have done it seems it might be better if we don't. In this uncertain economy I understand why we shouldn't and when I have spoke with our 1st mortgage company, they treated us like this was no big deal to them, they would honor our payments and would let us sign up for auto pay once the BK is over. So, if they send the papers to sign, we will sign, but if not, then we will just keep making payments and leave it at that.

[markdel16]

I've read somewhere that there are cases where if you don't reaffirm that the mortgage company doesn't update your credit report to say you've been paying monthly. Any one else hear this?

[BkinTX]

We have BofA. Haven't received a reaffirmation agreement (8 days (hopefully) from discharge). I have read that BofA doesn't reaffirm.

We are happy for the opportunity to ride through.

[struggling09]

Markdel16 - That is correct. If you do not affirm your mortgage, the mortgage company will not report it to the credit bureaus. This is the only down side of not reaffirming.

[markdel16]

So, doesn't that continue to hurt your credit for however many years you still have to pay on the mortgage (basically showing as negatives)? If my mortgage co doesn't re-affirm, I'm going to have negatives every month on my CR for the next 25 years!

[OhioFiler]

So, doesn't that continue to hurt your credit for however many years you still have to pay on the mortgage (basically showing as negatives)? If my mortgage co doesn't re-affirm, I'm going to have negatives every month on my CR for the next 25 years!

Your debt to the mortgage company is discharged in the bk. You don't owe them anything. You may voluntarily continue to pay them to hold off foreclosure but you are not obligated to pay them and they can't report your history of paying them voluntarily to the CRAs either.

[struggling09]

No. The debt will now be listed as discharged, as it is included in the bankruptcy. Basically what this means is you will continue to pay your mortgage. As long as you do not miss a payment, and you pay on time, you will be fine. If for any reason in the future, you are unable to make payments, and want out of the house, you can do so without the bank coming after you because you have included this debt in your bankruptcy.

It does not have a continuing negative effect on your credit report. However, this particular monthly payment will not help in rebuilding your credit.

Hope this helps.

[markdel16]

Oh, ok.. That makes me feel better. But, it's still really scary.. Would hate to lose my house. And with a re-affirm, I suppose then everything as far as the loan continues as it is now? (Sorry for hijacking the thread).

[laurannm]

There are some mortgage companies that continue to report on-time payments even if you don't reaffirm (albeit it's rare but it does happen). Our 2nd mortgage with First Horizon was not reaffirmed and they continue to report.

It's highly unlikely that even if you miss a payment, they will start foreclosure. Reaffirm or no reaffirm, your state laws are still in affect and the lender must still follow the foreclosure process\timeline outlined in those laws. Now if you fall 60+ days late, then your asking for trouble. At the end of the day, they don't want your house, especially in this market and assuming you are like most people and don't have any equity, or very little.

Even without a reaffirm, in almost all cases it's business as usual. The only difference will most be likely be that your mortgage company will either stop sending statements altogether and cut off your online access to your account, or they will send statements but will mark them as "informational only".

To give some peace of mind, you could call your lender and ask them about it. We called Citimortgage and First Horizon (spoke to their BK dept) before filing and got the details on how they handle these types of situations.

[48adam22]

Sorry,,, another hijacker on this post but it's related to house mortgage and you guys are so smart

I just filed for Chpt 7,,,, Cent CA. I am listed as a co-owner / debtor on the 1st and 2nd deed mortgage of a home that my ex-wife received in the divorce. As far as the County recorder's office is concerned, she is the owner of the home, but SESLOC FCU still holds me 50 % financially responsible. I listed these debts on schedule D. My ex-wife is always one month behind on the payments.

On Form 8 - Chaptor 7 Individual Debtor's Statement Of Intention, I indicated the property will be surrended and not reaffirmed. I also sent to the creditor a Notice To Creditor Of Filing For Bankruptcy letter stating I did not own the property, have any interest in the 1st or 2nd deed mortgage, and would not reaffirm these debts.

My question is will the chapter 7 discharge let me remove my name from these two debts ?? Make her refinance on her own ?? I really don't want to stay on the 1st or 2nd mortgage. If she defaults in 2-3-7 years, it will effect any good credit rating that I might have been able to get higher.

[drlj78]

Wondering how a joint re-affirm would affect a mortgage that was initially singl

I signed the original loan papers myself... Bank sent re-affirm agreements with both names... Since I was original debtor, I should be the only one having to sign correct? Or since the BK is joint, we both have to sign the re-affirm? Doesn't quite make sense.

Also, if only one is signing would we both have to go to the reaffirm hearing?