Forebearance after Ch 7

[scrapiron7]

My ex-wife and I had our Ch7 case discharged in 2007, and we did not reaffirm the home loan. She was later awarded the house in 2008 during our divorce, but I did not sign a Quit Claim deed.

She's now 3 months behind on her mortgage and has received a Forebearance agreement from the lender. My name is also on this letter. It requires both of us to sign. My question is, if that letter of forebearance is signed and returned, does that make her (us) liable again even though we didn't reaffirm during the Ch7 case?

Thanks.

[2Bshinyandnew]

I would like the answer to this as well.

Anyone?

[brokenbuthealed]

More than likely it would. The forebearance agreement probably includes verbiage indicating that you would begin making payments of $xxx.xx starting on a certain date. That would be a new contractual agreement to pay a debt.

[2Bshinyandnew]

More than likely it would. The forebearance agreement probably includes verbiage indicating that you would begin making payments of $xxx.xx starting on a certain date. That would be a new contractual agreement to pay a debt.

That is what I suspected. In my case, my ex filed a CH7 and included the mortgage to the house he is a co-borrower on in the BK. He quit claimed the house to me. I haven't filed BK (yet) but was hoping that with the new Homeowner Affordability and Stability Plan I would be eligible for a mod or forbearance without having to be late. I realized that even though my ex is no longer legally responsible for the mortgage, the lender may require his signature on a mod/forbearance since his name was on the original mortgage... and that isn't going to happen, why should he reaffirm a loan to a house he has no legal right or interest in?

The irony is, if we were still married and living in the same home, my income wouldn't have plummeted and I wouldn't need to ask for a forbearance to begin with.

[StartingOver08]

Forebearance agreements are another contract.

IMO, there is no question that the forebearance agreement is another contract, and the fact that you have already filed a CH 7 and been discharged from one means you would be obligated to perform on this agreement without having the option to file BK again for several years.

I found a pretty good explanation of the terms typically found in a forebearance agreement:



To read the entire article go here: http://legal.realdealdocs.com/index....ce-agreements/

There is another very comprehensive article on the types of terms typically found in forebearance agreements that gives you insight from the lenders perspective: http://www.turnaround.org/Publicatio...?objectId=9651

Unless you were going to get some real benefit from signing it - I would stay away from it, JMO.

[2Bshinyandnew]

IMO, there is no question that the forebearance agreement is another contract, and the fact that you have already filed a CH 7 and been discharged from one means you would be obligated to perform on this agreement without having the option to file BK again for several years.

<snip>

Unless you were going to get some real benefit from signing it - I would stay away from it, JMO.

OK, so the new foreclosure workout plan, Obamas' Homeowner Affordability and Stability Plan is really a mortgage mod and not a forbearance then, correct? I'm still unsure the difference.

[StartingOver08]

I think (IMO) the difference between a mortgage modification and a forebearance agreement is:

1) the modification is a permanent change to the existing loan agreement (change in the length, or interest rate, or mtg balance etc)
2) the forebearance agreement appears to be a temporary arrangement for the repayment of past due funds during which time the lender will not persue the debtor for a limited defined period of time. In the second link I provided to you earlier, it was stated that forebearance agreements have repayments that are higher than the original loan note (to catch up the arrearage).

JMO, I think if you get a decent loan modification it is worth doing, only if it benefits you of course.