Can someone explain a Ride-Through?

[kcfaninin]

Hi,
I have been reading posts about a "ride-through" regarding a mortgage. How does it work and who does it benefit?

[BobMango]

A ride-through is what you do when you don't want to reaffirm (and you don't!) and you don't want to surrender the house. The bankruptcy code doesn't really specify this as an option, but many people are successful at doing it. On my filing regarding my intentions for my house, it reads "retain and pay", instead of either reaffirm or surrender.

Basically you would refuse to sign a reaffirmation agreement, but keep paying your mortgage as normal. The debt is discharged as a result of the bankruptcy, meaning you are no longer liable for it. As long as you keep making payments on time, most lenders will allow you to keep the property.

The reason you don't want to reaffirm your mortgage is that you are recommitting to the loan after the bankruptcy. If you lose your job or your financial circumstances worsen and you fall behind, you lose the house and are still responsible for the deficiency on the loan, and since you can't file bankruptcy for a number of years, you're stuck. If you do the ride-through and the same thing happens, you can walk away without worrying about a deficiency balance.

[kcfaninin]

A ride-through is what you do when you don't want to reaffirm (and you don't!) and you don't want to surrender the house. The bankruptcy code doesn't really specify this as an option, but many people are successful at doing it. On my filing regarding my intentions for my house, it reads "retain and pay", instead of either reaffirm or surrender.

Basically you would refuse to sign a reaffirmation agreement, but keep paying your mortgage as normal. The debt is discharged as a result of the bankruptcy, meaning you are no longer liable for it. As long as you keep making payments on time, most lenders will allow you to keep the property.

The reason you don't want to reaffirm your mortgage is that you are recommitting to the loan after the bankruptcy. If you lose your job or your financial circumstances worsen and you fall behind, you lose the house and are still responsible for the deficiency on the loan, and since you can't file bankruptcy for a number of years, you're stuck. If you do the ride-through and the same thing happens, you can walk away without worrying about a deficiency balance.

So, aren't you basically making payments on a house that isn't yours? What happens when you want to sell or you pay for the next 30 years, who gets the title?

[AngelinaCat]

It isn't yours until you have it fully paid for anyway. You handle your payments exactly as you are now, and as long as you are current with your payments, it acts just the same as if you never filed BK.

Now, some lenders, and banking institutions whether true banks or credit unions--and some districts will NOT allow a ride-through. Then you would have to sign the reaffirmation papers. That is to protect THEM, not you. Your best best, if you are able to do it is the ride-through. That benefits YOU.

Good luck!

[crescentmoon]

Out of curiosity, what happens if the loan is sold in the future? Can it be sold? Or, because its technically been discharged, they can't sell it anymore?

KBB

[venus82]

Just wondering if anyone has been able to do a mortgage ride-through in New Jersey (Northern District) ? Thanks

[momtoroxy]

I am not sure if it's allowed in every state. Soon after we filed, we got something from Chase stating that "retain and pay" was not an option. We either have to sign the reaffirmation (which are are not going to do) or surrender. Is it state law? Or based on who your lender is?

[kcfaninin]

I am not sure if it's allowed in every state. Soon after we filed, we got something from Chase stating that "retain and pay" was not an option. We either have to sign the reaffirmation (which are are not going to do) or surrender. Is it state law? Or based on who your lender is?

We have our mortgage through Chase also. I called their BK dept and asked some questions. They stated after we are discharged, we can reapply for a loan modification. They didn't say anything about reaffirmation or surrendering the property. Bad thing is, if we sign a reaffirmation, get discharged and they deny the modification, we're stuck with the high mortgage payment. I have not heard good things about Chase. They tell you one thing and do another. So we are deciding if that is a gamble we want to take.

We have not filed yet, we're getting all our ducks in a row first!!.

[momtoroxy]

I've also heard bad things about Chase as far as loan mods etc. We are underwater on our house by so much that it just does not make sense to reaffirm. We have a good fixed rate, but our housing market was hit very hard. Tough choices!

[awayalways]

[logansdad]

this is a car loan not a mortgage and is becoming all the rage right now in Michigan since we are right by the FoMoCo HQ. Everyone is all over this my lawyer just told me today I cant do the "ride and pay" with a smirk I know we discussed this prior and he said I could, but I just now noticed the date was a September this year. They can repo outside of a non reaffirm and willl do so because every month the car is out of their control it depreciates or gets worn out even more.