Mortgage question

[ladyjenn]

If we have the choice to NOT reaffirm our mortgage with Wells Fargo (we are and always have been current), will they report the on time payments to the credit reporting agencies? I am just curious if it will still show and continue to shour our years of on time payments. TIA

[SMinGA]

Most likely not, unless they continue reporting by some fluke/mistake.

[ladyjenn]

So it will be like the loan doesn't exist on our CR's or they just won't report anything? Is it harder to build credit this way?
Thanks again.

[SMinGA]

It will show you have a mortgage account with current balance $0 included in bankruptcy as of xx/yy date. After that, there should be no more reporting.

Since you will no longer owe the mortgage, there are no payments to report. You would of course continue to pay if you intend to keep living in the house, since the mortgage co's security interest remains.

[ladyjenn]

Thank you!
What about when you reaffirm? Do they report it then? I am just thinking rebuilding credit wise. We probably would not be able to get re-fi'ed with another company in two years??? We are looking to lower our interest rate of 9.63%, but I understand I need to wait at least two years? Is that correct?
Sorry for all the ??'s...this is SO nerve racking! I am so scared to go through with this, but know it is the right thing so we and our kids have a better life.
It is just that everything always backfires on us! We try try try, just to dig ourselves deeper in the long run. It would be nice if this process goes off without a hitch. I DOUBT IT THOUGH knowing my luck.

[SMinGA]

If you reaffirm, you accept responsibility for the loan despite the bankruptcy. You owe the payments, if you default they can go after you for any deficiency judgements (depending on your state). Also means your payments should report...

As to how & when to refinance, that would depend on factors at the time of refinancing. Credit score, income, debt payments, etc.

As to the immediate high interest rate - have you contacted your mortgage company about any sort of modification?

[ladyjenn]

No, we haven't talked to them, as we haven't filed yet and I don't want to tip them off. Don't ask me why...I guess I am just scared to tell them because of the "unknown". Once they see we file, is that when I should contact them? to me I would think I would get better ressults if they see we are serious and are filing.

[SMinGA]

Its kind of a bigger question than that...

With where you stand now in terms of income vs. expenses - do you think you would have trouble filing ch. 7 if your mortgage were lower in payment? If so, then you might not want to rock the boat... File ch. 7 and try for a mod after. On the other hand, if you don't think it could possibly make a difference in your bankruptcy case, calling to ask your mortgage company about your options can't hurt anything.

From my experience - and what I've read of others - in some cases being behind and/or on the verge of filing bankruptcy (or having recently filed) could help get a modification. Kind of like if you're making your payments and not struggling to pay other debts, then you don't 'need' help.

Then there is a question of whether or not you have urgency to file next month (from your siggy, I believe that is your intent). If you start a mod now it would probably be interrupted/canceled by the automatic stay. Meaning you'd have to start over later anyhow. My inhouse mod started mid April, I've sent paperwork back and now just waiting for BofAmerica to finish their end. Was told a few weeks for the investor to sign off and be official. But if I had filed in that time frame, I believe they would have needed relief from the stay OR to wait til discharge to continue. And with too much time passing, may have needed to start over?

So in case I have not confused you properly I'd suggest:

1. If you do not think a mod (lowered mortgage payment) would hurt your chances of a ch. 7, and you can delay your filing if it looks like a mod will happen - then apply for the mod and see what happens. If your lender works with you & gets it done, you'd probably want it to be finalized before filing.

2. Otherwise look into it once you have been discharged, but do not reaffirm. Mods are not conditional on reaffirmation. They almost all seem to have wording to the effect that if the original loan was discharged and not reaffirmed in a BK case, then the mod does not change that status.

The idea behind the mods is to help people stay in their homes, if reducing the rate and/or amortizing the arrears will make that possible.

No, we haven't talked to them, as we haven't filed yet and I don't want to tip them off. Don't ask me why...I guess I am just scared to tell them because of the "unknown". Once they see we file, is that when I should contact them? to me I would think I would get better ressults if they see we are serious and are filing.

[ConfusedinOC]

The loan mod I signed stated that if I were to file BK and loan was discharged I would not be responsible for paying.

[ladyjenn]

Its kind of a bigger question than that...

With where you stand now in terms of income vs. expenses - do you think you would have trouble filing ch. 7 if your mortgage were lower in payment? If so, then you might not want to rock the boat... File ch. 7 and try for a mod after. On the other hand, if you don't think it could possibly make a difference in your bankruptcy case, calling to ask your mortgage company about your options can't hurt anything.

From my experience - and what I've read of others - in some cases being behind and/or on the verge of filing bankruptcy (or having recently filed) could help get a modification. Kind of like if you're making your payments and not struggling to pay other debts, then you don't 'need' help.

Then there is a question of whether or not you have urgency to file next month (from your siggy, I believe that is your intent). If you start a mod now it would probably be interrupted/canceled by the automatic stay. Meaning you'd have to start over later anyhow. My inhouse mod started mid April, I've sent paperwork back and now just waiting for BofAmerica to finish their end. Was told a few weeks for the investor to sign off and be official. But if I had filed in that time frame, I believe they would have needed relief from the stay OR to wait til discharge to continue. And with too much time passing, may have needed to start over?

So in case I have not confused you properly I'd suggest:

1. If you do not think a mod (lowered mortgage payment) would hurt your chances of a ch. 7, and you can delay your filing if it looks like a mod will happen - then apply for the mod and see what happens. If your lender works with you & gets it done, you'd probably want it to be finalized before filing.

2. Otherwise look into it once you have been discharged, but do not reaffirm. Mods are not conditional on reaffirmation. They almost all seem to have wording to the effect that if the original loan was discharged and not reaffirmed in a BK case, then the mod does not change that status.

The idea behind the mods is to help people stay in their homes, if reducing the rate and/or amortizing the arrears will make that possible.

Well thank you!!!
We can afford our mortgage since we aren't paying the CC's now. Which brings me to the question...we will have around $600/ month (I can get that $$ down some since I didn't include clothing/entertainemnt type of things in my expense list) not going to CC's, we will even still qualify for CH 7?

[Meatstick]

We have Wells Fargo also and did NOT reaffirm our loan as we are way upside down. We had our 341 last month and have always been on-time with payments. We plan to stay put for now.

Last week Wells Fargo filed a relief from stay. Don't know what this is about unless they will try and sucker us into a loan mod or refinance. Either that or they figure they may as well go ahead and foreclose and recoup what they can thru the VA and then auction the home.

If anyone can answer, if we are still current on the mortgage can Wells Fargo still initiate the foreclosure process since we selected intent to surrender ?? My inclination is to say yes they can and maybe I should stop making payments and get out now. Just wanting to stay put until kiddos finish school in a few years.

[blockhead]

It depends on state law. In some states they cannot foreclose for a non-monetary default.

[ladyjenn]

We have Wells Fargo also and did NOT reaffirm our loan as we are way upside down. We had our 341 last month and have always been on-time with payments. We plan to stay put for now.

Last week Wells Fargo filed a relief from stay. Don't know what this is about unless they will try and sucker us into a loan mod or refinance. Either that or they figure they may as well go ahead and foreclose and recoup what they can thru the VA and then auction the home.

If anyone can answer, if we are still current on the mortgage can Wells Fargo still initiate the foreclosure process since we selected intent to surrender ?? My inclination is to say yes they can and maybe I should stop making payments and get out now. Just wanting to stay put until kiddos finish school in a few years.

Oh boy! Didn't want to hear that!
Best of luck! Does relief from stay just mean they want to come after you before the discharge?
Why did you select "intent to surrender" if you wanted to stay?

[Meatstick]

The filing of relief from stay may just be a procedural thing so they can contact us about a possible refinance and/or modification. It doesn't necessarily mean they will move to foreclose which is why I am stumped since we are current.

No way we would reaffirm a mortgage that is underwater by more than $100k. We were almost sure they would not initiate foreclosure proceedings since we are current. If we do reaffirm and 6 months down the road something happens and we lose the house we are then on the hook for the loan. Since we don't reaffirm we can just walk away without any financial liability.

[blockhead]

Wf

I was current on WF and heard nothing from them and did not reaffirm, just said I was going to retain and pay pursuant to contract. They didn't file anything.