Reaffirmation of Home and Autos...

[ilovemycaitybug]

We are wanting to keep our home and cars, so we requested reaffirmation of all of them. Well, I have the reaffirmation agreements to sign for the two cars. One car is with CitiFinancial Auto (formerly Auto One Acceptance) and the other is with a local bank (only a year and a couple months left to pay). The home is with Chase Manhattan (it is a rural loan, one that is to help small communities and rural areas grow... I think it's some kind of government thing). I thought I'd read something on here that it wasn't always good to reaffirm, even if you want to keep the property, as long as you keep paying. I asked my attorney about this, and he said if there is ANY doubt, do not reaffirm. I just worry about the ability to sell our home in the future (it's in a not-so-great neighborhood in a small town and we want to be out of here in the next 3-4 years) and what if something happens with the car that we have a large balance on (over 7K - but I don't think worth so much, 04 Chevrolet Classic w/66000 miles on it). We can't afford major repairs, before or after b/k. Does anyone know anything about this from experience or general knowledge, and even better, does anyone know anything about these companies??? I don't want to lose the properties at this time and will continue to pay, but want the option to "get out" since we can't afford repairs and the property value is not so great. Thanks!

[SinkingFast]

Generally speaking, Lenders aren't in the business of owning houses or cars. They're in the business of lending money and making money off loans that are paid as agreed.

Technically, you cannot "ride thru" under New Law. Others have done it by filing an Intent to Reaffirm and then not filing a signed Reaffirmation Agreement with the Court.

If you don't reaffirm, the conditions of the original contracts remain the same. Same payment, same interest rate, same term, same due dates. Only thing is, you need to make sure to make your payments on time.

[lrprn]

I don't want to lose the properties at this time and will continue to pay, but want the option to "get out" since we can't afford repairs and the property value is not so great.

If you *do* reaffirm: You already know that you can't afford the home repairs and may not be able to sell the house yourselves. If your lender forecloses because your finances unexpectedly hit the skids or you decide in the future to surrender the house to the lender because you can't sell it, you will be responsible for paying whatever remains on your loan amount after the house is auctioned off.

If you *do not* reaffirm: If the mortgage lender forecloses or you surrender the home, no matter what happens at the auction you walk away owing nothing. However, if you have even one late payment before your mortgage is paid in full, you could lose your home.

Only you can decide which is the best option for your situation.

[manglicmot]

One other consideration - some lenders will not report your payments to the CRA's if you have not reaffirmed. In my own situation I do not care about re-establishing credit so I readily agreed with my attorney to not reaffirm.