Reaffirmation agreement

[freakedout]

I know there is tons of stuff out there on this but still have questions. We had our 341 meeting on 1/20 and our attorney gave us copies that day of our reaffirmation agreements for our house we would like to keep and one vehicle. Our dilema is that I am unemployed and without a job we can't afford our house on my husband's salary. So we are leaning towards not signing. Our attorney says now that the laws have changed some banks can still proceed with foreclosure even if you are paying if you don't sign the reaffirmation. Anyone have experience with not signing the agreement. What happened after. Also, anyone with direct experience with Huntington Bank and reaffirmation of house. Also, even if I did find a job soon, why would I sign?? We are planning to sign for the vehicle. We are about even on that vehicle.

[car67]

I would say dont sign for the house....... Whats worse case?
They send you to foreclosure if your not paying? If your paying
I really doubt any mortgage company will foreclose in this day and time.

House values are dropping and banks are at a loss what to do... Dont resign for the house your only hurting yourself.

If they file foreclosure and you really want to keep the house then come back and file a Chapt 13 to keep house and mortgage under protection of the
Trustee and courts......

[HakunaMatata]

Is your attorney encouraging you to sign? Do you have equity?

If you're not presently in a financial position to pay the mortgage, I definitely wouldn't reaffirm. We, unfortunately, live in high "what if" times. What if you don't secure employment in the immediate future? What if your husband loses his job? What if you're faced with a major medical expense? Do you want to be responsible for the mortgage or a potential deficiency (contingent upon State laws)? I don't share these scenarios with you in an effort to raise fear, instead to build upon your strengths. You made a wise business decision to move financially forward and this is the pace you should continue to maintain. As we all know, life happens and we need to be prepared to address future issues.

I'm unsure of your area; however, I don't think property values have come close to stabilizing. Many areas have continued to decrease. Not only have values declined, neighborhoods have as well. Given the opportunity to refrain from committing to the unknown, I would opt to not reaffirm. You will, likely, be able to remain in the house provided your payments remain current. If you find you're unable to continue your payments or if you decide the house isn't best-suited for you, you can leave. By not reaffirming, your house will be included in your BK and while your lender would likely move through the foreclosure process, a foreclosure won't be reflected on your credit report.

You're wise to question this. Wishing you a successful decision!

[freakedout]

I feel like our attorney is encouraging us to sign if we want to stay - I don't know why we would sign unless the bank would foreclose. We are current but I did pay the last payment 10 days late. The attorney agrees we can't afford the home if I don't find a job. Today he said he could stall our discharge if I need more time for a job so we could wait to sign, but as you stated what if my husband loses his job. We live in Michigan and my husband is in manufacturing. (2 negatives) Yes we are upside down probably. Hard to say because nothing has sold around us. He keeps saying we want to sign so our payments get reported on our credit report. At this time, that is the least of my worries as I don't plan on borrowing anytime soon. The problem is this is our "dream home". Its on water, my son's best friend and our good friends live 3 doors over, blah, blah blah. I know its just a house but really don't want to let it go if we don't have too. I used to make well over 100K so if and when I find a job our situation will change drastically for the better. Even if I find a job at half of what I was making we could afford the payment. I guess we just won't sign.

[car67]

I see no reason to sign. Like I state come back with Chapt 13 if need be.
I think the economy and house prices are still in decline mode and you
should not resign. Not in your best interest.

[HakunaMatata]

Oh, the joys of Michigan living. I'm here with you!

You really have a great grasp on your situation (including the "dream" aspect). However, I'm unsure of your attorney's opinion. Staying and signing (a reaffirmation) aren't necessarily synonymous and exclusive. There are plenty of people who "ride through" or "pay and stay".

I understand your husband's position on credit score. I felt similarly when I began the BK process. Thankfully, my friendship with FICO has been suspended. I started without credit, built a great score, and I can do it again. So, too, can you...even without a reaffirmation. Your stance is ideal. Credit scores shouldn't be on the priority list. Perhaps it would be advantageous to ask your husband how much he is willing to pay for a credit score? If your house is underwater and/or value declines, if you don't secure employment soon, etc....there are some costly factors embedded here.

Even if the bank pursues a foreclosure when you're current and haven't reaffirmed (highly unlikely given the condition of the Michigan real estate market, highly unlikely when payments are current), this doesn't necessarily mean you lose your house. We have a lovely six month redemption period (following the Sheriff's Sale) during which you can buy back your property. If you decide to vacate and you haven't reaffirmed, you will not be subjected to a potential deficiency judgment (permitted in Michigan) as you aren't personally liable for the loan. No reaffirmation = no strings attached. Your loan will be included in your BK.

I honestly don't think we've hit real estate rock bottom yet. There appears to be a new wave of foreclosures on the horizon. These will further reduce our already steadily declining values. We were duped into believing we lived in investments. It's going to take time to digest all that has unfolded and to regroup/stabilize. I watch houses in my area and I'm amazed by the "low cost". I've had moments when I wished I was in a position to buy. Well, those same houses are still on the market and the selling prices have further reduced.

Sadly, securing employment doesn't equate maintaining employment -and your attorney should take this into consideration if he is representing your best interests. How does he intend to stall your discharge?

[aces67]

In your present situation I would not sign. It sounds like if you reaffirm it's going to be a huge financial burden and there's no need in that.