living in home with no affirmation

[amisifer]

my spouse and i filed chapter 7 about a year ago with the assumption that our attorney had reaffirmed the home along with the 2 cars.well after we were discharged i was checking credit reports to make sure everything was taken care of and to my dismay ,our home showed as included in bankruptcy! i contacted our attorney he pulled the file and said they never sent the reaffirmation, it is obvious that our attorney failed in this matter. i then asked if this could be fixed, he stated you that the positive is that you can walk away from the house at any time. is this true? will this then become a forclosure? because now we have the house for sale, no luck in this market
what are the options, any ideas???

[HHM]

Whether you reaffirmed or not, if you walked away from the house, it would end in foreclosure. (foreclosure is the legal process by which banks regain title of property on which they loaned money, there is also a process a called "Deed in Lieu", but the bank has to agree to do it). Also, most states do not allow collection of a deficiency balance upon foreclosure in the first place.

It's too bad that it is being reported as included in BK, but the law is still up in the air about how a home loan should be reported on a credit report even if it is reaffirmed. Many mortgage companies are taking the position that even if you reaffirm, the home loan is still, technically, included in your BK. However, I am of the opinion that if you reaffirm, then it should be reported as "paid as agreed".

I don't think there is anything you can do now. Basically, you just treat it as if you owe the money. The only way to get out of the house is to either sell it for at least as much as you owe, or let the bank foreclose...and that would be true if you reaffirmed or not.

I guess what I am saying is, when it come to mortgage, it really doesn't matter whether you reaffirm or not. So in that respect, your attorney has neither failed you, but has not helped you either.

Is the reason you want to sell the house is because you cannot afford the payments.