Affirming or not affirming mortgages???

[Resigned2BK]

Can anyone provide a really good link for me on this? WA is a non-judicial state, so does that factor in at all? Given that we have reason to believe in the past couple of weeks that BofA could possibly not even start official foreclosure for awhile yet, I know we want to at least get the Ch 7 out of the way and are concerned about being on the hook for the 1st & HELOC even though we'd be including it all. And if we could potentially be still in this house through next winter/spring, seems awfully tempting to stay and save on the rent.

[Sweetpea3829]

We did not reaffirm our mortgage in our 2007 bk7. Our home is in RI, a non-judicial state. We stopped paying in August of this year and have only received three different notices of acceleration, the most recent set to expire June 21st.

I would definitely NOT reaffirm your mortgage.

[Resigned2BK]

So if we, say, did our Ch 7, got discharged at the end of the year, didn't reaffirm the mortgage and also continued not to pay on it either, then we will not be on the hook for the high price tag of foreclosure fees when BofA gets around to that (assuming it's not started and stayed during the Ch 7 process)? The information is very confusing on this. I know we don't want to reaffirm, I'm just trying to establish that we for sure won't be on the hook for anything that happens (I should say WILL happen) to our mortgages after the discharge. Sounds like some here don't even have the foreclosure show up on the credit report at all if they did a BK (which would be nice if I still had a chance at securing federal gov't work down the road due to that).

[screentest]

So if we, say, did our Ch 7, got discharged at the end of the year, didn't reaffirm the mortgage and also continued not to pay on it either, then we will not be on the hook for the high price tag of foreclosure fees when BofA gets around to that (assuming it's not started and stayed during the Ch 7 process)? The information is very confusing on this. I know we don't want to reaffirm, I'm just trying to establish that we for sure won't be on the hook for anything that happens (I should say WILL happen) to our mortgages after the discharge. Sounds like some here don't even have the foreclosure show up on the credit report at all if they did a BK (which would be nice if I still had a chance at securing federal gov't work down the road due to that).

Resigned,

If you don't, and I wouldn't, reaffirm your mortgages after your Bk 7 discharge then that is the end of your financial obligation related to your mortgages. No deficiencies, no cost of foreclosure, no tax issues at all etc. Your mortgages die with your discharge.

You can stay and pay but that is your choice and you have no further obligation to do so.

ST

[Sweetpea3829]

Hmmm, I think I understand where your confusion is. If I understand correctly, you're in default right now, filing or have filed bk7, not yet discharged and you want to know what will happen to your liability for the mortgage when it forecloses, yes? Are you thinking you'll foreclose before or after the discharge? Or you're just not sure?

We filed our bk7 because of a second property that we owned at the time. It's a long story, but it went into default in, I want to say summer of 2006. We started the bk process in Oct of that year but I don't think our attorney actually filed it until much later than that. Possibly even early 2007. In Feb of 2007, I received notification that the defaulted property was to be sold at foreclosure auction later that month. Our discharge occurred in April of '07 and records indicate the property actually didn't officially foreclose until Dec. of '07.

Everything was covered by the bk. Everything. We had zero liability to the debts accrued from that property.

Now...our first property that we'd never been late on...the loan for it was also discharged. Before we made the decision to stop paying and staying on it, we checked with our attorney to confirm we would have no liability. And so far, we do not.

Hope that helps. It's all very confusing.

[AngelinaCat]

Here is the link to the thread started by Despritfreya, that covers this very subject:

http://www.bkforum.com/showthread.php?62833-Why-reaffirming-a-mortgage-is-a-very-very-bad-idea.&highlight=

[Resigned2BK]

Hmmm, I think I understand where your confusion is. If I understand correctly, you're in default right now, filing or have filed bk7, not yet discharged and you want to know what will happen to your liability for the mortgage when it forecloses, yes? Are you thinking you'll foreclose before or after the discharge? Or you're just not sure?

Yes, exactly. We hit the 90 days late mark in Feb after being denied for HAMP a 2nd time due to the same missing document problem (even though we faxed them several times on the matter) and haven't been paying and we weren't planning to actually file the Ch7 until probably August or September. Actually, it's the big elephant in the room mortgage deficiency issue that's made us wait this long to file BK rather than do it last Fall when we were 60 days late across almost all CCs.

We filed our bk7 because of a second property that we owned at the time. It's a long story, but it went into default in, I want to say summer of 2006. We started the bk process in Oct of that year but I don't think our attorney actually filed it until much later than that. Possibly even early 2007. In Feb of 2007, I received notification that the defaulted property was to be sold at foreclosure auction later that month. Our discharge occurred in April of '07 and records indicate the property actually didn't officially foreclose until Dec. of '07.

Everything was covered by the bk. Everything. We had zero liability to the debts accrued from that property.

Now...our first property that we'd never been late on...the loan for it was also discharged. Before we made the decision to stop paying and staying on it, we checked with our attorney to confirm we would have no liability. And so far, we do not.

Hope that helps. It's all very confusing.

Yes it does help and yes it is all very confusing. See, this is why I love the internet. I can research stuff like this out and not have to rely solely on what we think we are hearing advisors telling us! Part of the confusion is that our HUD approved housing/credit counselor back in Sept told us to dump the house and THEN go BK because otherwise we'll be liable for any deficiency and especially if it goes to foreclosure we'll have a lot of extra deficiency to worry about with extra fees. That being a person who'd been a loan officer for over 10 years until the real estate crash. Then when we got a consultation with our attorney in Oct, he seemed to be backing up everything the other guy said. Only thing is, then I had the bright idea to see if we could do HAMP and not have to lose our house forever, just do the BK and move on, but of course HAMP is something no one gets qualified for. Even the HUD counselor told us it's like 1 in 30 getting a mod from what he observed over the years, but we tried anyway as we figured wasn't that supposed to be the bag-o-crap the government sold the public to get us all to believe that it would be worth it to throw billions at banks to bail them out. That then the banks would be forced to play ball to find a way to keep people in their homes who are losing their homes due to the banks essentially crashing the economy in the 1st place? Ah hahahaha. Naivety.

Honestly at this point what with it still being difficult to get a job, seeing all these private landlords insisting on a credit check for potential applicants, and knowing we'll still need to come up with about $100 per every 100 sp ft for a house rental realistically (so $1200/mo for something that won't be too cramped for the 5 years it'll take to rebuild our lives) -- it just makes me wonder given people from my own area saying they are still not completely foreclosed after over a year that heck, we might as well get the Ch7 done with instead of doing deed-in-lieu and renting right before or as we file.

Angelina, I saw the thread which is informative in terms of risk of reaffirming. Sorry to confuse with thinking we were even thinking of ever reaffirming. We just haven't been even told we have an option to stay it out and not reaffirm by anyone we're in talks with about our situation. It's very frustrating!

[ValleYum]

Hi Resigned2BK!

Wow, what is up with the folks you have been getting advice from?!? Yikes!

Have you been to see several attorneys for a free consultation?

You can see my BK timeline in my siggy - but the back story is we missed our first mortgage payment in October when Chase wouldn't allow a payment deferral to the end of the mortgage when we had a financial fizzle. They told me they couldn't help me AT ALL until I was 90 days past due. That infuriated me. Every time the collectors called, I asked them if they could help me yet, when they said no I just said well I guess we'll chat again soon. Ugh. That still makes me fume.

We never thought that BK would be an option for us (higher income, no kids at home) but one sleepless night in October I landed here and went to see attorneys as soon as I could schedule them after I found out that we could benefit from a BK. After our consult, I cut up the cards and we missed the first credit card payments in November and filed BK in December.

Our attorney checked "Reaffirm" on the SOI but we were honest that it was pending a modification request. We were able to claim our mortgage payment and also able to include the arrears calculation on our Means Test.

We just got our NOD ~2 weeks ago. We have 150 days (~5 months) from the date of the NOD before the home can be sold at auction. WA has super finite time rules for their non-judicial foreclosures. This foreclosure timeline from the Attorney General's office has been invaluable to me: http://www.atg.wa.gov/uploadedFiles/...etimelines.pdf

Don't move out when you file - move when the sale is scheduled/held and SAVE the money you have from not paying mortgages for rental deposits, movers, etc. A big deposit helps private landlords overlook shaky credit in almost every case. We are in contact with a few potential landlords - I put a Housing Wanted ad on Craigslist with a blind gmail address that I have gotten remarkable response from. We have pets and want a single level home so we know it will be a challenge but not impossible.

My attorney told me the only thing I will have to pay post-discharge is our HOA dues and renter's insurance for our contents/liability if the homeowners policy isn't paid from escrow. I feel fairly sure they won't pay my insurance in July - and I honestly have no problem paying the premium myself. Fair is fair after all.

Find a good lawyer and file. You will be so relieved. Also, know that you can use the Federal bankruptcy exemptions here in WA, so you can protect some assets with the very generous wild-card amount available there (since you aren't keeping your house).

Credit score wise: We were in the low to mid 700's when we filed. My scores now average over 670 and hubby's are over 650 and I really haven't done more than dispute 2 or 3 items which still haven't been corrected.

If you are in SW WA, feel free to PM and I can give you our attorney info.

[Sweetpea3829]

Don't move out when you file - move when the sale is scheduled/held and SAVE the money you have from not paying mortgages for rental deposits, movers, etc.

I'd go a step further and say, don't move out until they tell you you have to. Angle for a cash for keys payment. Some friends of ours were able to stay in their home for a good two years post foreclosure sale. It can be worth it to fight it out.

Now...as far as the advice you've been given...when we started down this road, we didn't know of the BK Forum and instead had to rely on the advice of a hapless attorney moronic boob. We sat in his office in October of 2006...I pleaded with him to get the bankruptcy filed before November started. I had no idea how long it would take, I had no idea how it was going to play out, etc. All I knew was that our lender had given us until November 1st to bring the loan current otherwise foreclosure proceedings would begin. I thought we would be screwed if we didn't file before the foreclosure began. It would have been nice if said hapless attorney moronic boob had said to me, "Hey...don't worry about it...you can file before or after the foreclosure...you won't be on the hook." If I knew then what I know now, I would have spent many fewer nights lying awake sleepless. I would have had a stress level that was significantly less than what mine was, etc.

At the time, we had a 9 month old and were expecting our second baby in December.

Now, as far as liability goes for insurance fees...we never had to pay insurance on the house after we defaulted. The bank put their own insurance on the house. And good thing they did too, because pipes burst that winter.

But I've heard that insurance liability will differ according to lender....so....bear that in mind.

[Resigned2BK]

What about the property taxes, though? I thought back taxes of any kind couldn't be included in BK and our property tax is included in our monthly mortgage payment. And here that's a lot of money, like close to $4k a year.

Valle, I've wanted to consult with a different attorney lately. The one we have is the only guy in his firm that does BK, and when we saw him initially in October he hadn't been doing BK long but I thought I still had a little retainer at that firm from a small consultation on a matter with an atty that left years ago. We can tell the guy is bright and seems to be pretty hardworking and conscientious, but certain things have nagged at me. Like when I asked him for a good layman's guide to explaining BK, he said there is none he knows of and the best he can think of in terms of accuracy are CLEs. Well, I am not a lawyer, so I doubt I'm going to get much out of a CLE except a good snooze while trying to look up citations and such. And he doesn't seem to think much of people who try to research on their own without a professional background in it -- kind of like every last one of us at this site are doing, but I believe knowledge is power and am not deterred. And then for me the kicker is when I emailed him last week with a forwarded email of one of my business contacts who has been contacted by this one particular collector who made my contact think she was a potential customer looking for me -- because this collector has done several things, she's the worst of the lot, and frankly I know my attorney could throw multiple charges of violating FDCPA and make them stick meaning HE can make some nice extra change (not to mention it'd help us with moving expenses down the road or something) and he just sent this snippy email back saying the retainer for BK is for that and this will be an extra hourly charge of his time that we'll have to come up with up front (except he should know damn well that atty fees are added onto the fines too, grrrrr!). In his defense, we think his wife probably had their first baby recently as she was due around now, so he's probably a little addled, but still, seems like BK attys should be more than helpful and licking their chops when they see clear FDCPA violations and he admitted it definitely was! We've only paid $200 into his retainer so far and my husband is pretty against finding a new lawyer (I tried that talk last week), so I guess we're stuck. Hubby's business debt is why we have to do BK, so really, if he's comfortable and given I think the guy WILL do a decent job once he can actually get going, I guess I need to accept it and go with it.

So glad I found this place last fall though. It really helps my peace of mind to read up on what all goes on and what will probably happen in our case.

[screentest]

What about the property taxes, though? I thought back taxes of any kind couldn't be included in BK and our property tax is included in our monthly mortgage payment. And here that's a lot of money, like close to $4k a year.

Valle, I've wanted to consult with a different attorney lately. The one we have is the only guy in his firm that does BK, and when we saw him initially in October he hadn't been doing BK long but I thought I still had a little retainer at that firm from a small consultation on a matter with an atty that left years ago. We can tell the guy is bright and seems to be pretty hardworking and conscientious, but certain things have nagged at me. Like when I asked him for a good layman's guide to explaining BK, he said there is none he knows of and the best he can think of in terms of accuracy are CLEs. Well, I am not a lawyer, so I doubt I'm going to get much out of a CLE except a good snooze while trying to look up citations and such. And he doesn't seem to think much of people who try to research on their own without a professional background in it -- kind of like every last one of us at this site are doing, but I believe knowledge is power and am not deterred. And then for me the kicker is when I emailed him last week with a forwarded email of one of my business contacts who has been contacted by this one particular collector who made my contact think she was a potential customer looking for me -- because this collector has done several things, she's the worst of the lot, and frankly I know my attorney could throw multiple charges of violating FDCPA and make them stick meaning HE can make some nice extra change (not to mention it'd help us with moving expenses down the road or something) and he just sent this snippy email back saying the retainer for BK is for that and this will be an extra hourly charge of his time that we'll have to come up with up front (except he should know damn well that atty fees are added onto the fines too, grrrrr!). In his defense, we think his wife probably had their first baby recently as she was due around now, so he's probably a little addled, but still, seems like BK attys should be more than helpful and licking their chops when they see clear FDCPA violations and he admitted it definitely was! We've only paid $200 into his retainer so far and my husband is pretty against finding a new lawyer (I tried that talk last week), so I guess we're stuck. Hubby's business debt is why we have to do BK, so really, if he's comfortable and given I think the guy WILL do a decent job once he can actually get going, I guess I need to accept it and go with it.

So glad I found this place last fall though. It really helps my peace of mind to read up on what all goes on and what will probably happen in our case.

Resigned,

Your property taxes are attached to your property not to you. They go with the property. If they are impounded in your loan then your lender will pay them when you stop making the payments. They will then add this amount into your loan that you will never be paying back. (Discharged) Make sense?

ST

[Sweetpea3829]

Yup...our property taxes went with the property. Along with a water bill, a sewer bill, etc. When we made the decision to stop paying on that particular property...we made the decision that we were not dumping one more red cent into the place. And we didn't.

You only paid $200 for a retainer? I *think* we paid around $1,000. It was a lot. I remember sitting there thinking, how do most people file bankruptcy? Who the heck can affford to?!?

I've been thinking about trying to go after a company that has been violating the bankruptcy discharge. Funny thing is, it's a company that we've never had dealings with in the past. Radian PMI. We don't have PMI on our discharged loan. Never have. They've called multiple times and I've told them multiple times....we don't have PMI, stop calling us. Finally, I asked for a supervisor and informed him that the mortgage they were calling in regards to had been discharged in a BK7. Haven't heard from them since.

I probably could have pursued them, but it would have meant contacting that same moronic boob lawyer. And I think I'm about done dealing with Mr. Shows up to the hearing with a giant mustard stain on his shirt. Not worth my aggravation.

[sh9730]

Resigned,

As for a layman's guide. Search these forums for NOLO guide....I havent used it, but for those who want to, everyone seems to say it is a great text.

[Resigned2BK]

You only paid $200 for a retainer? I *think* we paid around $1,000. It was a lot. I remember sitting there thinking, how do most people file bankruptcy? Who the heck can affford to?!?

Oh no, that's just part of his retainer, part of why he's cranky. His full retainer for doing a Ch7 is $1600, so we'd still need to send in another $1400 plus the $295 filing fee to actually get everything officially going. The $200 is more like earnest money to make sure he knows we're serious.

[Resigned2BK]

Resigned,

Your property taxes are attached to your property not to you. They go with the property. If they are impounded in your loan then your lender will pay them when you stop making the payments. They will then add this amount into your loan that you will never be paying back. (Discharged) Make sense?

ST

Interesting and very very good to hear! That makes sticking it out until almost the bitter end a lot more attractive suddenly.