Mortgage question

[RNmomtofour]

Hi,

Had my petition meeting the lawyer today. House is worth 226k, we owe 296k. We do NOT want to lose our house. I plan on staying there until we are old and gray. I mentioned re-affirming it to the lawyer and she freaked out saying it was a terrible decision etc. and she would not sign off on that and a judge would probably balk at the idea. We are doing the stay and pay option and I am very nervous. We are a payment and a half behind. After the discharge, can they come and take the house and start foreclosure? Not sure we can catch it up that quickly. We are in IL and our lender is Wells Fargo.

Any advice appreciated!

[justbroke]

Reaffirming would not fix the issue with you being behind (in arrears). You will need to straighten that out with the bank. Some banks are willing to modify discharged mortgages and re-age the debt, bringing you current.

If you have already filed, I would certainly call the loss mitigation (bankruptcy) department at Wells Fargo and ask if you can get a modification "before" discharge. I was in a Chapter 13 paying arrears but converted to Chapter 7. I contacted BofA and they did a modification... no trial payments... which brought me current as of discharge. Do not fall for the "trial payment" thing. If they are willing to re-age the loan, they will probably need permission to "work" (speak) with you, and that will need to come from your attorney (if represented).

Otherwise, you could also seek to go into an installment agreement where you pay back the "arrears" over 6 months. In either case, you will need to work with the lender.

[ld2366eh]

Illinois is a judicial state. You have some time. We r in IL. Stopped paying in may 2012 for the March pmt. Lis pendens filed end of July. You have 7 months past the Lis pendens to redeem the mortgage. Wells will probably work with you. Can't hurt to contact them. Btw we r still in our house. Google foreclosure timeline in IL.

[RNmomtofour]

Wells will work with us to what? Catch up our payment? When should we contact them? After the petition is filed or after the discharge? Lawyer is filing the petition today. What is Lis Pendens? The petition? Sorry, we are so new to this. I really appreciate everyone's help. I am just worried that we will not get "credit" for paying on our house on our credit report/score. It will show the mortgage being discharged, not paid on. The lawyer said we can contest that with all 3 credit bureaus. Has anyone done that? Thanks in advance.

[justbroke]

"Lis pendens" is Latin for "pending lawsuit". It is a notification that is filed in the public record to indicate that some type of legal event is potentially clouding the title on a certain property. In other words, it's just the "notice" of a foreclosure. When I made my modification deal with my lender, BofA, I did so within days after filing! If you file through an attorney, the lender would want a letter signed by the attorney allowing them to "work" with you (since they aren't allowed to "pursue" collection during the Stay).

I need to say this clearly and in a separate paragraph. Do not worry about receiving "credit" for paying on your house! That should be the last thing on your mind... even if it should even enter your mind. If and when you ever need to purchase a new home, you can have the underwriter consider your on-time payments by adding them manually to the underwriting. What you should worry about, is paying bills on time and not running up debt. (A discharged mortgage being reported as such, is what we call an accurately reported tradeline.)

Trust me when I say this, your credit score will bounce back based on your prior credit history (over the last 7 years), and your current credit history. Your current credit history is more important as things will age off. I'm approaching a 700 FICO and I'm just getting to 3 years out from Chapter 7. The only reason I'm not over a 700 is because I have some new (car) debt.

For anyone else wondering, the 3 year mark (since discharge) has done nothing for my credit score! I am 5 years from my filing date in May 2008. I believe that the 2 year discharge mark was a major improvement, but the actual discharge had me back over 640 to start with. Of course, prior credit history (before filing bankruptcy) has more weight around discharge. The key is, obtain a "little" credit, and then pay on time and do not ever miss a payment. When you hit that 7 (or 10) years post discharge, you should be easily in the mid-700s.

[Drazil65]

Two things, first do a search for reaffirmation and mortgage related stuff here on the forum, a wealth of information, read, read, read.

Second, forget about your credit score, seriously forget about it, stop living and breathing for the credit score or the banks will have you right back in the same position that got you here to begin with. Good Luck!