Ch7 - no reaffirm - no loan mod

[cheekybegr]

I'm worried sick 3 kids under 7 and recently served foreclosure paperwork, here is my tale woe.
Purchased new construction in 06 home lost $64k in 18 months filed for Ch 7 April 08 discarged July 08 we told judge we wanted to keep our home and signed reaffimation paper work and mailed it to GMAC. In November 08 things got tight and we got behind on Mortgage we saw ad for 877 995 HOPE. We called HOPE and they told us we qualified for a loan mod they sent a letter to GMAC and a copy to us and explained to sit tight nothing will happen until 90-120 days behind. We started to work with Loss mitigation, who recently told us our loan was never reaffirmed as it wasnt filed, because they had no reaffirmation on file we couldnt get a loan mod (fannie mae loan). This was the first we heard that it wasnt reaffirmed we had no reason to beleive otherwise. They then served us foreclosure paperwork (3 weeks ago).
They explain there is nothing they can or will do, we either reinstate loan $15k to reinstate back to the original terms or walk away. I dont know why they are doing this we believe we can afford to stay with a mod and might be able to scrape up enough to reinstate (with family loan) but they will not budge.
Time is ticking court dates are scheduled - what can I do?
Mark

[StartingOver08]

Well, if you are $64k under water - why do you want to keep the loan?

If you decide to keep the loan anyway, you may want to reinstate the loan and then pay on time for the next 12 months because there is a new program coming out tomorrow (4/1/2009) to help with fannie mae loans. But look at the qualifying criteria first to see if you fit - I believe it will be similar to the freddie mac programs that require you to be current and not to have missed a payment for the past 12 months.

[cheekybegr]

We were hopeful that the mortgage Company would modify the loan, but it's almost as if they deliberately didn't file the reaffirmation. As long as we are in this loan they will not let us modify due to the internal policy. We were unable to refinance initially because it lost so much value so quickly no bank would take on the loan. As we were sub prime all our available cash was going to the mortgage so the CC's took the hit and in the end we filed BK were were able to keep the home as we had no equity in it.
The loan is backed by Fannie Mae so we thought we were a shoe in after the hope now people recommended us for a loan modification, but we then learned of the reaffirmation mess. If we reinstate we would be back in the position of hoping the house builds enough equity to refinance, the lady in loss mitigation explained hundreds are in the same situation but I am at a loss as to why they will not modify our loan. Thanks for the Fannie Mae info I will check it out.
Is anyone else having the same reaffirmation problems?

[HHM]

The problem is, lenders are not "required" to offer you a modificaiton. Saying you qualify and actually qualifying are different things. Being recommended for a mod and actually getting one, as you found out, do not always even out.

[StartingOver08]

Really the bank may have done you a favor by not filing that reaffirmation agreement. You can walk away anytime without impacting your credit further because your loan shows iib.

If you are $64k under water, that is significant (depending upon the actual house value now). You need to seriously consider what is your best option for you. Waiting many years to get equity in this upside down house or truly getting your fresh start with a rental and saving for a home and payment that makes sense to you.

I would start with determining the homes actual value as of today (get a CMA - they are free). Figure out if you can rent something for less than your current cost to carry (PITI and maint fee, if any). Then compare to a modification - if the modification is not much different than what you have, you just might want to walk away from the home, IMHO.