Reaffirmation of mortgage

[bobbiestarr]

I really want to reaffirm my mortgage, but I know nearly everyone says don’t do it…here’s my stats: Chapter 7, no asset.. bought the house 2008 $68000, balance about at $64500, at 5.785% or so… payment only at about $520 (includes pmi, insurance and taxes)… tax assessment $79000 (I know really means nothing)… house on my street recent foreclosure sale at $40000, but I have an extra 1 ½ acres bringing my value up about $10000 over all the other houses on the street… so if I am underwater, it’s not by much… I love my house… but I know what ya’ll say, you never know what can happen… what do you guys think… what would you do?

[DaisysMom]

I filed Feb. 23rd, 341 is April 6th. My house is valued at about 40 K and I owe 25K on it. I have about 15 K in equity. My attorney asked me if I wanted to reaffirm and I asked what benefit there would be and he couldn't think of any. I think I am going to stay and pay and not reaffirm. I have thought that if there was a possibility to get an lower interest rate I might reaffirm at some future time, but no hurry now. My payment is 165.56 and txs/ins are 130.00.

Good luck. DM

[justbroke]

Getting a rate reduction at reaffirmation is very difficult. Most lenders would keep the same terms. I think that I only actually read of one case where the lender "modified" the loan through the reaffirmation. Personally, I wouldn't do reaffirm.

[BobMango]

Why do you want to reaffirm? If you think it will somehow protect your interest in the house you're mistaken. As long as you continue to pay per the original agreement you will not lose the house. They can't force you out or change the terms, so what do you think you will gain by reaffirming?

The bank has every reason to get you to reaffirm since they then can exercise all legal remedies if you need to walk away. Why give them that power for nothing? I suppose if they were offering a significant rate reduction or reducing the amount of the mortgage it might be somewhat of a temptation, but I really see you as having everything to lose and nothing to gain by reaffirming, so why do it?

[btbeme]

You gain nothing, and lose a lot, by reaffirming.

The bank has no legal means to foreclose unless you stop paying. You are safe. But if disaster strikes in the future, you can still walk away if you do NOT reaffirm.

[bobbiestarr]

Thanks for your replies... I guess I just needed some confirmation on why not to reafirm... from what I can see is that the only thing I lose is the ability to get my mortgage info online from my mortgagage company and no report on my credit score, but from my other research, I can still get an annual payment schedule and get the credit reporting agentcies and post my ontime payments myself... thnanks again.

[btbeme]

I have thought that if there was a possibility to get an lower interest rate I might reaffirm at some future time, but no hurry now. DM

You have more leverage after discharge on a non-reaffirmed loan. But here is something to think about...

If you are not late and in danger of foreclosure, your bank will likely not even consider a loan modification. You would only be able to do something like that via a traditional refi. But, you will probably not qualify for a refi because of your BK; and besides, the cost of a refi (appraisal, closing costs, points, etc) would likely negate any savings you would see for such a small loan. Here in AZ, where standard-issue mortgages are about $200k or more, a refi makes sense. But for $25k, I'd say you are better off spending the $$$ that you would spend for closing costs of a refi and make an extra mortgage principle payment or two That will work in your favor down the road.

You can try for a mod after discharge, but they generally will only do so with people who are in trouble. But, certainly try.

[btbeme]

Thanks for your replies... I guess I just needed some confirmation on why not to reafirm... from what I can see is that the only thing I lose is the ability to get my mortgage info online from my mortgagage company and no report on my credit score, but from my other research, I can still get an annual payment schedule and get the credit reporting agentcies and post my ontime payments myself... thnanks again.

Once you discharge, you can send the bank a request to reinstate your access and information. They will do so with the proper paperwork. You can also ask if they will continue to report - they might just do so.

[bobbiestarr]

Once you discharge, you can send the bank a request to reinstate your access and information. They will do so with the proper paperwork. You can also ask if they will continue to report - they might just do so.

Well, I didn't know that these 2 things were even a possible option.... I'm in my 60 day wait right now so once I discharge I will definately get that paperwork to get on line access and see if I can get them to continue reporting, .... thanks for the info...