Mortgage reaffirmation - actual experiences? long...

[sjades]

Hi,
Before anyone jumps on me..LOL… We’re toying with the idea of re-affirming our mortgage….We’ve kept up with the payments and have never been late and don’t anticipate ever being late (knock on wood), but our income took a hit and the cc’s were the first things that we stopped paying and had to file C7 (currently in 60-day club). I’ve read all of the pros of not re-affirming and have researched it to death but still have some questions for those who’ve reaffirmed and who’ve not…some actual experiences maybe from some folks who had filed bk a year or more ago (hopefully you’re still on this forum…)?

•Has anyone who has re-affirmed their mortgage ever regretted doing so and why?

•If you did not re-affirm and have been paying your mortgage on time and in good standing etc....
o have you had any problems with your mortgage company…for example, has any service waned compared to your pre-bk days (if you had any questions, do they help or is it like pulling teeth?), have you gotten any and all of your regular statements/services as in pre-bk days?
ohave you tried to re-finance/modify loan post discharge and had any problems

o have you applied for any home equity loans and been successful/not (this is much later obviously…we’ve never done this and don’t anticipate doing this for years…our home is over 38 years old and we’ve been fixing it up, but it may need some major work in a few years…)

o did you have any problems selling or any problems with transferring title if you finally paid the entire mortgage?

o If you’re concerned about your credit score, were you able to report your payment history to the credit bureaus without problems (or I hear some people ask the mortgage companies to do it, but I’m thinking it’s not mandatory if you request it).

o Has anyone had a mortgage company come after their property even if you’ve paid on time etc? It doesn’t seem legal, but I didn’t know if anyone has had any oddball issues like that. Our home is worth more than what we owe on it and it’s considered prime property so I don’t know if there’re any companies that think that this is their “chance” to take the home and sell it (the market is not as good as in the past, but homes in the area sell really quickly still).




From all that we’ve read it seems that if we pay, we stay and they shouldn’t have anything against us if we don’t re-affirm and we shouldn’t be treated any differently because of that, but it seems that mortgage companies may differ esp with service. In particular, we’re with PNC Mortgage. We got a one page standard letter from them saying that they'd prefer to reaffirm (duh) and if we were interested in that to contact them. I'm curious as to what terms they come up with (rates/fees etc) than what we have so I called but was on hold for 28 minutes which is when i hung up (multi-tasking while on hold).

Really not scared of not re-affirming and only trying to weigh different aspects that may become important to me. At this point, I’m not sweating a low credit score…other ways to rebuild credit…more interested in making sure we are able to keep our house, but considering all of the other things that may come along in 1 to a few years and wondering if re-affirming is a good idea that may produce less hassles. Or am I worrying over nothing. thanks for your opinions in advance. shel.

[tcreegan]

Hi schel,

Did you read the stickie on reaffirming? Might be some examples there....

It might be a moot point, a reaffirmation has to be done before the discharge and if you are in the 60 day club...depending on what end of the 60 days...there might not be enough time. And even if you can get one filed, your attorney or the BK judge has to approve it.

We had an older home, GMAC wouldn't negotiate terms, no equity to speak of, ...no way, wouldn't touch a reaffirmation with a ten foot pole

Tom in Colo

[SunshineGal]

Hi Sjades,

As Tom said, read the stickie, there is one about why you should never reaffirm a mortgage. As for getting a HELOC, a BK is going to make it difficult anyway, the lending guidelines have really tightened up.

I have no idea about the TX foreclosure laws, so you'll have to do some research. In our state, FL, it has been ruled that you must reaffirm or surrender, however, in order for the lender to force you to surrender they have to petition the court at which time you have the option to reopen the case and reaffirm. (I think.) As far as I know, its only the smaller banks and credit unions who have tried to enforce it. We didn't reaffirm so I guess I'll find out how our lender handles it.

Some lenders can get pretty nasty about issuing a verification of mortgage when you didn't reaffirm. Since a lender will require proof of on time mortgage payments if you need a mortgage, my best suggestion is to keep cancelled checks or bank statements showing the payment made, and the tax notices they have to send to the IRS.

[sjades]

Hi guys,
thanks for the responses....i read the stickie and got dizzy after a while. :-) today is day 10 after our 341 so we would have time to re-affirm if we decided to do it, but we're leaning more towards not especially when being put on hold for that long. i'll see if i can find anything on the texas foreclosure laws... thanks again!

[okiebk09]

Not sure if my story will help or not.....

We filed January 2009. Had our 341 in February and Dishcarged in May 2009 after calling the court clerk and requesting her to do so. On our original papers we had the intention of reaffirming and did paperwork as such. We were not in a large paymnet, not upside and in fact have equity in the house, and not really past due. I believe we had one payment 30 at that time. Anyway the more I read the more we decided after we had filed and had our 341 mtg that we did not want to reaffirm. However, the istuation took care of itseld because Chase did not get their end of the paperwork done on the reaffirmation before our discharge. So we ended up with a "ride-through" anyway and very glad we did. We regained access online to our account within 2 months of discharge. We have had no trouble making payments and on time. Chase has not given us any trouble and we recently called to ask them to report our payments to the credit bureaus and they said they would. So, do I recommend that you do reaffirm....NO.....there is not any trouble with doing a "ride-through" and trust me banks right now don"t want your house. They want you to keep paying.

[csonly]

Tom, my mortgage is also with GMAC, but I was wondering, do you plan to stay and pay. They had the auto stay lifted and I now get statements and keep current, but wondering what your experience is with GMAC in particular.

[sjades]

thank you, okiebk09 -- that helps put my mind at ease.

[jdcat]

We reaffirmed our mortgage. Our mortgage payment is only $678 and with 3 kids, two dogs, two cats, 5 rats, a guinea pig and several fish (LOL) there is no way we could have found a place to rent for anywhere near what we pay to live here. Not that anyone would rent to us anyway. Not with our brood! Not reaffirming would have been the wrong thing for us to do.

Our mortgage company has given us not one bit of trouble so far. Granted it's only been 5 months since discharge but I believe the bank got what they wanted (the reaff) so are probably just as happy with the situation as we are.

[IBroke]

Not reaffirming would have been the wrong thing for us to do.

Just curious: Why? Not reaffirming certainly doesn't mean "moving out"...

[tcreegan]

Hi csonly,

GMAC wouldn't negotiate terms we could afford, wouldn't agree to HAMP terms, so we did the 'don't pay and leave' option. Another factor that tipped our hand was we found a much better deal w/ private, local investors in the next town over. Went with them, told GMAC we were vacating, they handled it well, put their insurance on the place, sent a guy over to winterize, restarted the foreclosure. I contacted their local lawyer and offered to sign the deed over, save them the cost of foreclosure, but they declined. Before the BK they were very hard to deal with, losing papers we sent, they sent papers we never got, wouldn't acknowledge they rec'd faxes, point-blank refused to give us contact info for people in the company who had more authority. After we filed BK, they were easy to contact by phone, kept us in the loop w/ everything they were doing. I didn't attempt to renegotiate b/c we had found the better deal locally. Thats my 'story of GMAC'

Tom in Colo

[jdcat]

Just curious: Why? Not reaffirming certainly doesn't mean "moving out"...

In our area the housing market wasn't really affected by the economy. Prices here have remained stable over the past 5 years. We were not upside down on our home, we actually have a nice chunk of equity in it that we were able to exempt. So those are two reasons. Another reason is because this house has been in my husbands family for over 80 years so we had family issues to consider. We didn't want to risk loosing the house to the bank if the bank decided to become troublesome later on. That would have been hard to explain to my husbands family. We have several other family members that would love to have the house.

If we hadn't reaffirmed and the bank decided to give us trouble later on we knew we'd have lots of trouble finding another place to live, not just because of the size of our family but because we knew our credit would be shot. This is not a scenario we were not willing to entertain. So keeping things stable for our kids was another factor.

But mostly we just didn't want the hassle of spending the next several years worrying about what the bank might do if it got a bug up it's butt. Reaffirming sort of puts us in control in a sense because we can now decided what we want to do with the house, keep or sell later on, and the bank can't step in and say they are taking it over for what ever reason. I don't actually know if the bank would ever do that and because we didn't know we nipped that possibility in the bud.

[IBroke]

In our area the housing market wasn't really affected by the economy. Prices here have remained stable over the past 5 years. We were not upside down on our home, we actually have a nice chunk of equity in it that we were able to exempt. So those are two reasons. Another reason is because this house has been in my husbands family for over 80 years so we had family issues to consider. We didn't want to risk loosing the house to the bank if the bank decided to become troublesome later on. That would have been hard to explain to my husbands family. We have several other family members that would love to have the house.

If we hadn't reaffirmed and the bank decided to give us trouble later on we knew we'd have lots of trouble finding another place to live, not just because of the size of our family but because we knew our credit would be shot. This is not a scenario we were not willing to entertain. So keeping things stable for our kids was another factor.

But mostly we just didn't want the hassle of spending the next several years worrying about what the bank might do if it got a bug up it's butt. Reaffirming sort of puts us in control in a sense because we can now decided what we want to do with the house, keep or sell later on, and the bank can't step in and say they are taking it over for what ever reason. I don't actually know if the bank would ever do that and because we didn't know we nipped that possibility in the bud.

Interesting - but I like to mention that all reasons you just described were reason to keep the house - but that ALL could be achieved WITHOUT a reaffirmation as well. Not reaffirming doesn't change your rights when it comes to ownership, equity etc.

Again, not reaffirming doesn't mean "losing the house"...

[dneil]

In our area the housing market wasn't really affected by the economy. Prices here have remained stable over the past 5 years. We were not upside down on our home, we actually have a nice chunk of equity in it that we were able to exempt. So those are two reasons. Another reason is because this house has been in my husbands family for over 80 years so we had family issues to consider. We didn't want to risk loosing the house to the bank if the bank decided to become troublesome later on. That would have been hard to explain to my husbands family. We have several other family members that would love to have the house.



If we hadn't reaffirmed and the bank decided to give us trouble later on we knew we'd have lots of trouble finding another place to live, not just because of the size of our family but because we knew our credit would be shot. This is not a scenario we were not willing to entertain. So keeping things stable for our kids was another factor.

But mostly we just didn't want the hassle of spending the next several years worrying about what the bank might do if it got a bug up it's butt. Reaffirming sort of puts us in control in a sense because we can now decided what we want to do with the house, keep or sell later on, and the bank can't step in and say they are taking it over for what ever reason. I don't actually know if the bank would ever do that and because we didn't know we nipped that possibility in the bud.

The only way they can take your house, whether you re-affirm or not, is if you don't make your payments. Re-affirming puts the bank back in control, not the owners of the home. The bank can NOT legally just come in and take your home UNLESS you haven't made your payments. We didn't reaffirm because if my husband gets sick or something happens and we can't make our mortgage payment, we can just "walk away" and the bank can not sue us personally because the debt is discharged. However, if my husband became sick or died and we couldn't make the payments and we did reaffirm... well, they can then sue us for the foreclosure, fines, attorney fees and the amount of mortgage owed.... because reaffirming puts you "back on the hook" with the bank.

[jdcat]

True to the above posts about being back on the hook for the debt. This is something we gave a lot of thought too. At first I was all for not reaffirming. Then thoughts about loosing our equity came into the picture. I could not find any information about what would happen to our equity if we missed payments and the bank took the house over. We didn't know if we'd loose it in that scenario. I'm guessing the foreclosure fees, fines and attorney costs would have eaten it up.

If we ever reach the point where we know we can no longer pay the mortgage we can sell rather quickly and walk away with our equity. The housing market in our area has actually done better than most of the country and our house would actually sell very quickly in this particular area. Even if we sell below the appraised value we'd walk with a good amount. So the equity issue was a big one for us. We didn't want to risk that.

As for the issue of being able to walk away if something happens like sickness or death we considered that too. And again we looked at from all kinds of angles. I know it's just a house but to our kids this is home and that's what stopped us short each time we discussed it and it would affect other family members also. If something were to happen to my husband I would not loose the house...for a few reasons. One is family would buy it up before that could happen. Another is life insurance would cover the pay off for the house in the case of death.

The option to "walk away" just wasn't an option that we needed to utilize I guess.

I know not reaffirming makes sense in lots of cases but I think in our particular case it just wasn't as big an issue.

[shark66]

If we ever reach the point where we know we can no longer pay the mortgage we can sell rather quickly and walk away with our equity. The housing market in our area has actually done better than most of the country and our house would actually sell very quickly in this particular area. Even if we sell below the appraised value we'd walk with a good amount. So the equity issue was a big one for us. We didn't want to risk that.

You wouldn't be risking anything. The equity is still yours if the house gets sold, whether you re-affirm the mortgage or not. It's really that simple.

Good luck.