Reaffirming mortgage after discharge?

[Miknan]

I know it's generally a bad idea so without going into that, can you reaffirm and modify a mortgage after discharge if it was originally included in the BK?

[Miknan]

Ok, just read on another thread that you can't reaffirm after discharge. I've also read you can't remodify during BK, so it seems there is no way to possibly stay in my house unless I stay and pay the full amount plus the amount I'm behind?

[LadyInTheRed]

Ok, just read on another thread that you can't reaffirm after discharge. I've also read you can't remodify during BK, so it seems there is no way to possibly stay in my house unless I stay and pay the full amount plus the amount I'm behind?

Either that or get the bank to work with you. Have you applied for a loan modification?

FYI, reaffirming the mortgage would not have improved your situation.

[justbroke]

Ok, just read on another thread that you can't reaffirm after discharge. I've also read you can't remodify during BK, so it seems there is no way to possibly stay in my house unless I stay and pay the full amount plus the amount I'm behind?

You actually can modify during the pendency of your bankruptcy (after filing and before discharge). I did just that thing.

To the real point on this, is can you get a modification. I would think that a bank is more willing to work with a modification after you discharge the debt. As Lady wrote, a reaffirmation wouldn't have improved anything. As a matter of fact, in your particular case... a reaffirmation would have been a very bad thing! You will need to become current on your mortgage by either entering into an installment plan (to repay over several months) or a modification. I would have hoped that your attorney thoroughly explained this to you.

Are you underwater on the home? Do you have more than one mortgage on the home?

[Miknan]

Justbroke, I guess the question is CAN you modify a debt that has already been discharged? I'm under the impression you can't. I already had my 341 July 22nd. If I have to do it before the discharge, I have little time. I don't know what to do. My lawyer had been incredibly disappointing.

[Miknan]

I am slightly underwater on the first but not too bad. I do have a second mortgage that I owe $24k on. I'd like to try and settle with them. Seems all just wishful thinking. If there were options to rent it wouldnt be so bad but I can count on my fingers of one hand how many rentals there are and they are outrageously expensive.

[justbroke]

Justbroke, I guess the question is CAN you modify a debt that has already been discharged?

This is a questionable area, but generally you can modify the terms in the Note. However, the Note will still be unenforceable since it was discharged. There are people who have done post-discharge modifications where there was no reaffirmation of the mortgage. Generally speaking, it is usually in the bank's best interest to modify the non-reaffirmed post-discharge mortgage so that the bank continues to receive a revenue stream.

The only real problems with post-discharge mortgage modifications (or even reaffirmed or non-discharged mortgages) is with subordination if there are junior liens.

Point of fact is that I received modification paperwork post discharge and the bank 100% knew that the debt was discharged. (The bank was Bank of America.) They make sure that all the language indicates that it's for "information purposes only" and that it's not a reaffirmation of the debt.

[LadyInTheRed]

Miknan, in order to reaffirm the mortgage, your attorney would have to certify that the reaffirmation would not be an undue hardship for you. If your attorney is unwilling to do that, you coud probably petition the court to approve it anyway, but the court would have to find that the reaffirmation is in your best interest and not a hardship. You said in another post that you can't afford the mortgage as is. I really doubt any attorney or judge will agree that it is in your best interest and not a hardship to reaffirm an underwater mortgage that you are already behind on and cannot afford in its current form.

It's up to the bank whether to modify a discharged mortgage or work with you in some other manner. Contact them after your discharge and find out what they are willing to do.

[Miknan]

Thank you both for all the very prompt and informative info. It's true, I cannot afford the mortgage the way it is now. I'm not asking for principle reduction. Really all I want is refinance what I owe into another 30 yr with a reduced interest rare. I'd pay back what I am late on. The risk here, even if they modify the loan, is I'm afraid to pay them all this money and them have them turn around and deny me like I've read has happened so many times. And then if course I have to try and settle that second.

[justbroke]

For what it's worth, not only did my bank not make "trial" payments, they immediately modified my mortgage with a new (recordable) modification of mortgage document! (They never recorded it.) I would not make "trial" payments when the debt is discharged! I would be wary of any "trial" payments.

I did, however, need to clear my escrow shortage which was $4K. That was about the same amount as one month's mortgage payment (actually less than one month's payment), so it wasn't all that bad!

[maddog2112]

I converted from a 13 to a 7 and did not reaffirm my first or 2nd. The 2 loans combined were approximately equal to what the house was worth, so I knew I could not settle either loan. My problem was my 2nd had a 14% interest rate and the payment was 1k on 86K. I was never late on either loan. The 2nd lifted the stay at some point during my 60 day wait, which made me very nervous. After the discharge I called 5th third who was holding my 2nd to try and get a better deal. They reduced my payment to 500.00 a month and reduced the fixed interest rate to 6%. I signed a paper which spelled out the new terms. I don`t know if the 2nd can still hold me to the balance if I ever walked away, but I am planning on keeping the house. That was all 2 years ago and I have had no problems with either loan since. I get statements every month as before. Hope this helps.

[murphsmom]

We modified our mortgage and it was approved and set, THEN we filed BK7. We were discharged last week, awaiting closing. Somewhere in the shuffle of the mod, and I think because we have our mortgage with a "small" local credit union, the reaffirmation paperwork got lost in the shuffle. The bank NEVER sent reaffirmation paperwork on the mortgage, so we have never signed anything. Since the mortgage was discharged in the BK, and we didn't reaffirm, I believe we can pay and stay (which we have been doing, and no one is questioning anything), OR we walk away from the house at any time. We will not reaffirm, simply because we are prepared to downsize our lives and not be committed to a mortgage for 30 more years, if needed. We learned after my husband got laid off, that things can happen financially at any time that could RUIN you, and I'm not committing to another 30 year monkey on our back.