Curious about Mortgage

[Egrain]

We filed a Ch. 7 BK and last Jan (2010) and was discharged in March with no hitches. We made full mortgage payments all through the proceedings and have continued to make our normal monthly payment. We plan on continuing to do this. However we did not reaffirm with the mortgage Co and they are not reporting to the credit reporting agencies that we are making our payments. I'm not sure where we stand with our mortgage company. On my credit report it states that the mortgate was included in the bankrupsy. Can the mortgage company forclose even thought we are making the agreed upon payments?? Do we still own our home ???

[scorpion35]

We filed a Ch. 7 BK and last Jan (2010) and was discharged in March with no hitches. We made full mortgage payments all through the proceedings and have continued to make our normal monthly payment. We plan on continuing to do this. However we did not reaffirm with the mortgage Co and they are not reporting to the credit reporting agencies that we are making our payments. I'm not sure where we stand with our mortgage company. On my credit report it states that the mortgate was included in the bankrupsy. Can the mortgage company forclose even thought we are making the agreed upon payments?? Do we still own our home ???

they can foreclose, but will not as long as u pay them on time
no u don't own your home,the bank does

[debee]

Even though you have a loan against the property, your name is still on the title at your county office. You have all the legal rights and obligations of the owner, because you're still that person. Your name is also still on the mortgage/deed of trust. Since your discharge, you are no longer personally liable for the debt which means if you are upside down and want to walk away, you cannot be pursued for a deficiency judgment. That is the real meaning and benefit of the IIB designation on your credit report.

The bank still has a lien on the property. If you default under the terms of your original loan contract, the lender will be able to proceed with foreclosure. They cannot just foreclose because you filed bankruptcy. You are protected by provisions in your state law that dictate what has to happen before the lender can begin foreclosure proceedings and the first thing that has to happen is "default".

They're not reporting your payments but that's normal.

[Egrain]

Thank you your answers were very helpful. Correct me if I am wrong. But since we built up our credit rating to try and buy a house. As long as we don't default on the home loan, we are still considered the home owners and don't need to panic that our credit rating sucks because of the BK. WE are 45,000 top heavy but we plan on being in this home for a long long time. So hopfully at some point that will work it'self out. WE will stick it out barring a death or catastrphic loss. What I was afraid of is sticking it out for 10/20 years, then having the bank take it away plus any equity we may have gained, because of the BK.

[LadyInTheRed]

Egrain, read the deed of trust and promissory note to see if filing bankruptcy or the discharge of the debt in bankruptcy is an event of default. If not, they won't be able to foreclose 10 to 20 years from now because of your BK. It is also possible that state law would prevent them from foreclosing if you stay current on payments. Even if they can foreclose, they aren't likely to if you keep making payments, but there is still a risk if it is allowed by the contract and state law.

[debee]

As long as we don't default on the home loan, we are still considered the home owners and don't need to panic ...

You are definitely the owner until either sale (voluntary or foreclosure), Deed-in-lieu, or quit-claim. If you ever get some equity in the property you will be able to sell the house, pay off the lender and keep your equity. If you stay until it is paid off, you will own it outright.

I was afraid of is sticking it out for 10/20 years, then having the bank take it away plus any equity we may have gained, because of the BK.

So long as you want to stay, as LITR pointed out, just keep paying your mortgage, taxes and insurance.

I copied the quote below from a thread called "Why reaffirming is a very very very bad idea". It's in the chapter 7 sub-forum right at the top and is a "sticky". Anyway the person who typed the quote below is one of the attorneys who posts here. Thought it might reassure you further.

Unlike personal property, there is no requirement in the bk Code to reaffirm a real property (real estate) loan. So long as you are not in default under your contract, under State law the lender cannot foreclose. (Please note - any provision in the contract that claims filing a bk is an incident of default is simply not enforceable.

[IBroke]

no u don't own your home,the bank does

Wrong.

[Egrain]

I looked back through our note and can find nothing about Bk what so ever. Unless it is hidden in some small print somewhere, default is stated as not paying a payment when it's due (my paraphrasing). So it looks like all is good. Wooo Hooo !!!
One thing that I did notice while looking through my note is that we did notagree to PMI anywhere in the mortgage. My lender sold my mortgage about 5 months ago and we were told by the new seervicer that we are paying roughly 98 a month in PMI. Can they just tack that on whenever they want ?? I noticed that my payment went up even though my taxes went down, but did not catch that until now. The new servicer does not send me monthly statements so I have to realy on phone calls for info.