The bank said I have 2 choices

[billf]

What does State law allow?

That's what it seems to come down to. If you are current and state law does not permit non-monetary default (whatever the mortgage note says about being in default if filing bk or other 'material change') then they can't foreclose.

[PoorGrammyinBK7]

well we have decided to play hard ball we are NOT signing anything an attempting a ride through. They sent some reaffirms today now with legal fees for their lawyers drawing up the papers joke. So we are prepared to move and live here for free if they start the process (still current)

Hi! I've been reading along - trying to stay out of it but I think you've made a wise decision for today's economy - not to reaffirm.

I do think they are bluffing. Our 1st mtg lender sent reaff papers and even showed up at the 341 - hoping to get us to sign! Had a little meeting after the 341 with her. We said we were considering it and we were - but they would have to re-do the papers as there were "errors" (but on the paper, we had just said "retain property and continue payments).

At that time, our home was worth about equal with what we owed (1st mtg plus HELOC). The next year it dropped $10K in value and right now, we are about $30K under water.

Soooo glad we did not reaffirm!!!

We have the additional problem of our 1st being a balloon mtg - due October 1st THIS year! Back when we filed, we were thinking we might refi - but then there is the problem of the 2nd and the lower value - don't see it happening because the 2nd would probably not subordinate to the first. So we are going to try and negotiate an extension of the loan - don't know if that is EVER done and settle the 2nd for less - otherwise they get nothing, because if this doesn't happen, we will probably walk. We have paid every month - never late, but will probably miss payments next month - on the 2nd - and see what happens keep current on the first for a few months, but if they don't settle, stop that too.

At least we won't owe all that money - which we would if we had reaffirmed.

Best of luck to you.

And to all of the experts here - I'm open to advice and suggestions!

[logansdad]

well just for entertainment DW had her broker friend do a CMA...It appears that my math was fuzzy. The value has dropped now to 130-140 area so now we are 35-45k under water now... The bank will loose ...10k in legal fees...15k in lost revenue (payments - taxes for 10 mos) total 60 -75 k...to come and kick us out because we wont sign a reaffirm but are still paying... I am feeling the day of not paying coming real soon. Glad I don't have any investments there lol

[logansdad]

That's what it seems to come down to. If you are current and state law does not permit non-monetary default (whatever the mortgage note says about being in default if filing bk or other 'material change') then they can't foreclose.

Bill where do I find this? I am in Michigan, lawyer seems to feel now that he was just handling the bk and isn't interested much in helping with this. I may just get a pit bull to handle it.