Don't like Mortgage Reaffirmation "Offer", but...

[Just]

My Mortgage Holder (Beneficial) just sent me Reaffirmation paperwork through my lawyer. My lawyer signed off that it would not be a hardship, but in the cover letter stated something to the effect that it is only recommended if the reaffirmation would somehow give us better terms. The terms actually seem to be worse. (We currently have a loan were the interest rate drops every August by 1/4 of a percent as long as we stay current-which we have. Checking with Beneficial we were told that the Reaffirmation Agreement would constitute a new contract and that would no longer hold.) Our mortgage is currently upside down by @$15,00.00. I don't think we will reaffirm, however there are several questions I have. (It's the weekend so can't call attorney-just trying to satisfy my curiosity.)
1. In Indiana there is a Homestead and Mortgage Exemption applied to Property Tax. Would we lose this by not reaffirming. (Residency Bonus at work based on Homestead exemption also as I work for the city I am in.)
2. Could they raise our payment/interest rate etc. by our not reaffirming.
3. Would we still "own" the house in the sense that if things turn around in our area and values go up in a few years we could sell the house and collect the "profit" or on the transverse, could Beneficial decide they want the house to sell if the value goes up?
Thank you for any help given in trying to understand this part of bankruptcy.
PS. Until I read the R. Agreement I thought Reaffirmation was "Yes, I want to keep my ORIGINAL loan current."

[StartingOver08]

Welcome to the Forum!
You are right to question the change in terms with Beneficial. Generally a reaffirmation is reaffirming the original terms, BUT it is not uncommon for the terms to be renegotiated during this economic period. Normally when the terms are renegotiated they are better for you and not worse! It appears that Beneficial is trying to do a unilateral change in terms not to your benefit....don't sign it. Contact your attorney to get your questions answered specifically for you. The general answers to your questions are:

1) Reaffirmation has nothing to do with Homestead Exemptions so reaffirming or not reaffirming would not change your homestead status. In our area, you file for Homestead with the county and it is automatically renewed as long as you are in the property. The mortgage has no impact on the Homestead Exemption. Check with your attorney to make sure it is the same in your area.

2) If you are paying on time with a ride through (pay and stay not reaffirmation) they can not change the terms. However, if you don't pay on time, they can start foreclosure proceedings. Once you are discharged you no longer owe the debt personally but the lien (mortgage) stays on the house until it is paid off. If you don't pay, they still have the right to foreclose and take the house.

3) You own the house until you either sell it or lose it to foreclosure or grant the ownership to someone else. A mortgage is a lien on the real property for $X, it is not an ownership interest in the property.

Don't let Beneficial take unfair advantage of you....it sounds like they are trying to pull one over on you.