Mortgage Questions

[dep05]

We filed BK in Oct05/discharged Jan06. Our mortgage was included in our bankruptcy, but I thought it had been reaffirmed since our lawyer asked us if we wanted to keep the house and we said yes. I pulled our credit reports to find that our mortgage account is closed, balance zero and included in bankruptcy.

So, I am wondering what this all means. We are current on our payments and have heard nothing from our mortgage company. Can we still live here and continue to pay our mortgage until we decide to purchase another house? Is this house technically still ours? Are we still gaining equity in it as we pay on it? And, in a couple years we'd like to move and buy a new house. Will we be able to sell this house like normal and would we have to sell it for the amount of the mortgage or could we just sell it for whatever we can get and that's what the mortgage company gets?

Sorry for all the questions, just confused. Thanks.

[SinkingFast]

The attny "ASKED" if you wanted to keep the house and you "SAID" yes.

Did you sign a Reaffirmation Agreement with the Lender on the house?? That's the question.

Asking and responding aren't legal documents that get filed with the Court.

You're gonna have to check on this to know for sure where you stand. Just because the Credit Reporting Agencies are saying the debt was included in BK doesn't make it so. It could be a reporting error on the part of your lender.

A Reaffirmation Agreement gets signed by both parties and entered into record with the Court. If you don't remember signing one and don't have a copy of it with your BK paperwork, you need to check either with the attny that handled your BK or the Clerk of the Court.

You need to know, for sure, if a Reaffirmation Agreement was signed with the Lender before you decide what to do next.

If you did not sign a Reaffirmation Agreement, the house is still technically yours in one sense. Your names are still on the Deed. The bank cannot sell the house out from under you because the title is not in their name. They'd have to Foreclose to get the house in their name.

As long as you remain current on the payments, the bank will probably allow you to continue living there as long as you'd like.

Whether or not the bank would object to you selling the house is gonna depend on the bank, the amount of the offer, and if they'll get paid off or not. If you did not Reaffirm the debt, you'll probably have to get approval from the Bank for anything you want to do with regards to selling.

Also, if you did not Reaffirm the debt, and choose to, you can simply walk away from the house at any time. I wouldn't recommend that tho. Foreclosure shows on your Credit History for 7 years. To have a BK and a Foreclosure is a double whammy on the Credit.

[dep05]

We did not sign a reaffirmation agreement. The paperwork that we filled out had our mortgage listed but also said we were going to retain collateral and continue to make payments. At the time I thought this meant reaffirming, so I wasn't aware something would need to be signed.

Should we consider this a good thing then? A year or so before we filed we refianced our mortgage and rolled in some debt making our mortgage alot higher than what we paid for the house. We have been worried about getting enough out of the house to cover what we owe(d) on it. We were hoping to break even at least, do we now not have to worry about that? I know leaving the house is an option, but not one we would want to take unless we had to. If we did go that route, would it really be listed as a foreclosure if it's already discharged?

Thanks again.

[poorme]

I asked the same question regarding the foreclosure appearing on my credit. My attorney is puzzled and confused, but also intrigued that technically we are free of the loan - the mortgage co can't report anything after the discharge, So, the action of foreclosure and possible eviction is more a matter of an 'owner evicting squatters' than the stereotypical foreclosure. As with an auto repo, once the discharge eliminated the debt...they can get their car, but technically can't 'repo' what you don't own anymore. That piece was confirmed for me.

I'm hoping some attorney browsing these boards may have an opinion on this.
????

[SinkingFast]

I think what you did was called a "Ride Through". Old Law Filers could reaffirm, return, or ride through. It's not an option under the New Law. In your case, doing the "Ride Through" discharged you of the liability of the debt on the house.

You are still the Deed/Title holder of record. If there's a problem, a slip and fall on the property, it's yours. So besure you continue to carry Homeowner's insurance to cover you against liability. As long as you continue to make your payments on time, you get to stay in the house. The Lender could move to Foreclose the very first time you're late or miss a payment. So if you're ever in financial trouble and may be late on a payment, be sure to call your Lender and discuss the situation with them. The Lender will most likely work with you. They're in the business of lending money, not owning homes.

Because your are still the owner of record, the Lender will have to Foreclose to get the Deed in thier name. The Lender cannot sell your property until they Foreclose and get the Deed in their name. How long Foreclosure would take depends on the State you live in. Some are short and go non-Judicial. Others, like New York, are very drawn out and always go Judicial.

You'd have to ask your attny what happens if you decide to sell and move. I'm not sure about that part. I do know one thing for sure. If you don't sell the house yourself and the bank does Foreclose, you'll have a double whammy on your Credit Report. Both the BK and the Foreclosure will show.

[dep05]

Thanks alot, you've been very helpful.

Our hope is to continue living here and making our payments on time and in a couple years when our credit gets a little better, purchase a new house and sell this one. Hopefully it works out that way. I just wish our payments could be reported on our credit reports. Is there any way they could or would do that even though it's discharged?

[brokemommy]

thx for advice

[debtisbad]

I was asked if I wanted to keep the house, I said "maybe not, depends on if I can afford it" So far, mortage co. still sending bills, and I continue to pay. I just WILL NOT reaffirm should I find myself in a bind. So far not trouble. I really do not even care if it is not reported. The other side of the coin is far more worrisome.

[edwards2]

Isnt the rule of thumb if you dont reaffirm then the mortgage company doesnt report your pay record?

[denisec]

Yes the bank can't report on the loan ever after the discharge. No foreclosure will get reported on your credit. If it's an FHA mortgage, the 3 year period starts from date of change of the deed, other loan 3 years from the discharge date.