Took A Risk and not Good Results

[chrissy92972]

We filed for BK7 in 2010 and it was discharged in Feb 2011. We filed because of medical bills. We re affirmed our mortgages. However our 1st was with Chase and we paid it all along. Our 2nd with Bank of America we stopped paying because on our credit reports it said discharged and the statements monthly said it was for informational purposes only. Chase always had us as paying on time and regular statements.

So now we get an Act 91 in the mail that our 2nd wants to foreclose. I have no idea what the house is worth, but I am 99 percent sure we owe more then it is worth. On the 1st we owe about 85000 and on the 2nd 45000. BOA wants $7000 now to stop foreclosure. We do not have 7 extra cents let along $7000.

We tried calling BOA to ask questions and to see about modification and we were told we do not qualify. My kids qualify for free lunch,but we cannot get a modification.

So we kind of want to stay in the house since we have lived here 10 years and we would rather not move, but do we have any options at this point?

Chrissy

[tobee43]

did you list the second on the petition? why did you reaffirm?

[LadyInTheRed]

Your low income could be the reason you don't qualify for a modification. You need to be able to show you can afford the modified loan.

Have you looked into a HEMAP loan? http://www.phfa.org/consumers/homeowners/hemap.aspx If you don't qualify, maybe a HEMAP counselor can suggest other options.

If there really is no equity in the 2nd, it is possible that Bank of America won't go through with the foreclosure, but is starting the preliminary steps as a bluff in order to try to get you to catch up on payments. So, I suggest you not move before an actual foreclosure takes place.

Unfortunately for you, your situation is the perfect example of why it is not a good idea to reaffirm a mortgage. I hope your experience will help others avoid the same mistake.

[tobee43]

so true lady, it's like be stuck between a rock and a hard place. can't meet the mortgage, but don't make enough to qualify for a loan modification.

chrissy, some great suggestions LITR has given you.

also, as lady points out, boa may just be doing this in attempt to get you caught up with your payments, since if they attempt or go through with a foreclosure procedure, the first will get paid before they will, and depending on what your house is worth in today's market, can really give you a true clue as to where boa is going with this. i HATE zillow.com, but you can at least see what other comps are or have sold for in your area. if, for example a home similar to yours last went for 90k, well, you'll know that boa really isn't going to bother since the only one that will get anything out of this will be the first lender and certainly not them.

[chrissy92972]

Yes, we did re affirm on both and also on my mini van lease. We needed a place to live and our two mortgages equal under $1000 a month and to rent would mean more money and taking the kids away from family. We can afford the mortgages (barely) but not the amount BOA wants now ($7000). I really think their monthly statements are misleading after BK discharge and our credit reports showl BOA as discharged. I know I asked about this on here in 2011 and was told to pay. I totally screwed up, but thought I was throwing money away by paying BOA. Thanks for all of the advice.

[tobee43]

did you file pro se? if not, your atty just gave you bad advise as far as reaffirming the mortgages, many people do, however, reaffirm their cars.

at this point that's really not important, you need to move forward, i was only wondering because if you hadn't reaffirm, of course you would be in a better position. again, i would see what your home is worth now, you can do that by just doing a little bit of google searching and see where boa is going with this. don't feel as though you screwed up, we all have made mistakes, it's just now you need to think of a way to fix it.

i'm also a bit confused, as your bk was discharged almost two years ago, have you been behind with boa all that time??? it's just so odd they would wait 2 years before not attempting to work with you on the arrears. but they are no picnic we all know that.

[chrissy92972]

We filed with a lawyer and since discharge in Feb 2011 have paid Chase monthly and stopped paying BOA in June 2011 when I realized what the statement and credit report said. They have sent monthly statements, but have not contacted us about any of this until January 2013. I am so confused?

[LadyInTheRed]

Yes, we did re affirm on both and also on my mini van lease. We needed a place to live and our two mortgages equal under $1000 a month and to rent would mean more money and taking the kids away from family. We can afford the mortgages (barely) but not the amount BOA wants now ($7000). I really think their monthly statements are misleading after BK discharge and our credit reports showl BOA as discharged. I know I asked about this on here in 2011 and was told to pay. I totally screwed up, but thought I was throwing money away by paying BOA. Thanks for all of the advice.

Are you certain you reaffirmed the mortgage? Did you actually sign a reaffirmation agreement with Bank of America that was then filed with the court? Your statement of intention that is filed with your petition may have stated an intent to reaffirm, but that is not enough to reafirm the mortgage.

If you didn't reafirm the mortgage, that could give you some leverage in negotiations with Bank of America because if you didn't reaffirm and they foreclose, they can't get a deficiency judgement against you.

[tobee43]

lady, right...are you certain you actually reaffirmed chrissy?

do you have a copy of the petition? the statement of intention is there. once again, as lady points out that's usually not enough, most times the bank send you a document you sign reaffirming the debt. did you have anything like that?

maybe a call to the atty's office that handle this for you may be helpful, they should have all the records.

[LadyInTheRed]

the statement of intention is there. once again, as lady points out that's usually not enough,

No usually about it. The statement of intentions is never enough to reaffirm a debt. The requirements to reaffirm a debt are listed in 11 USC 524(c):

(c) An agreement between a holder of a claim and the debtor, the consideration for which, in whole or in part, is based on a debt that is dischargeable in a case under this title is enforceable only to any extent enforceable under applicable nonbankruptcy law, whether or not discharge of such debt is waived, only if—
(1) such agreement was made before the granting of the discharge under section 727, 1141, 1228, or 1328 of this title;
(2) the debtor received the disclosures described in subsection (k) at or before the time at which the debtor signed the agreement;
(3) such agreement has been filed with the court and, if applicable, accompanied by a declaration or an affidavit of the attorney that represented the debtor during the course of negotiating an agreement under this subsection, which states that—
(A) such agreement represents a fully informed and voluntary agreement by the debtor;
(B) such agreement does not impose an undue hardship on the debtor or a dependent of the debtor; and
(C) the attorney fully advised the debtor of the legal effect and consequences of—
(i) an agreement of the kind specified in this subsection; and
(ii) any default under such an agreement;
(4) the debtor has not rescinded such agreement at any time prior to discharge or within sixty days after such agreement is filed with the court, whichever occurs later, by giving notice of rescission to the holder of such claim;
(5) the provisions of subsection (d) of this section have been complied with; and
(6)
(A) in a case concerning an individual who was not represented by an attorney during the course of negotiating an agreement under this subsection, the court approves such agreement as—
(i) not imposing an undue hardship on the debtor or a dependent of the debtor; and
(ii) in the best interest of the debtor.
(B) Subparagraph (A) shall not apply to the extent that such debt is a consumer debt secured by real property.

http://www.law.cornell.edu/uscode/text/11/524

maybe a call to the atty's office that handle this for you may be helpful, they should have all the records.

Yes. Definitely call your attorney to ask if you reaffirmed the mortgage.

[ld2366eh]

Could she check PACER to see the filing of a reaffirmation document?

[df04527]

You should also never make a decision like that based on your credit report. They are required, by law, to report it that way. I know, hindsight is 20/20, just pointing it out in case others read this.

[LadyInTheRed]

Could she check PACER to see the filing of a reaffirmation document?

Yes. But, if she doesn't already have a PACER account, asking her attorney is probably easier.

[chrissy92972]

I went on our pacer account and reviewed our case. The only re affirmation documents submitted were to Honda and the Chase for our first mortgage. So I was totally wrong about BOA.

At this point I am so confused as to what to do and what you are all saying. At some point we will see an attorney, not the BK one though. But until I save enough money for that or until BOA makes another move?

Please explain to me in easy terms what this means for us with BOA being the 2nd and sending us an Act 91. Out 1st is paid upto date.

Thanks!
Chrissy

[bcohen]

If you didn't reaffirm the home equity loan with B of A, they won't "make a move" other than charging off the debt and continuing to send billing statements. They CANNOT sue you for the debt, nor make harassing telephone calls to collect, because your bankruptcy discharge forbids that. Thus, you should quit paying the HELOC, let it charge off, and in a few years, try to settle. They won't foreclose, because there's no equity to foreclose on.