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Not Reaffirming - Long Term Effects

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  • Not Reaffirming - Long Term Effects

    I spoke with the attorney and right now due to a huge SBA loan, its best not to reaffirm, however the goal is to stay in the house for a few years, let the kids finish high school (there is an interest only first mortgage) and then at that point buy another house and walk away if necessary as the mortgage debt is never reaffirmed.

    My concern is that based on my understanding there will be no mortgage or rent shown on the credit report, so at that point getting a new loan will be extremely difficult.

    The lawyer is concerned with the here and now and thinks its not a big deal. I think it's important to be educated and know what your getting yourself into.

    Anyone have any experience with this in the past? Were you able to rent or get a new mortgage without a lot of difficulty? Your feedback is appreciated.

  • #2
    Originally posted by amei View Post
    I spoke with the attorney and right now due to a huge SBA loan, its best not to reaffirm, however the goal is to stay in the house for a few years, let the kids finish high school (there is an interest only first mortgage) and then at that point buy another house and walk away if necessary as the mortgage debt is never reaffirmed.

    My concern is that based on my understanding there will be no mortgage or rent shown on the credit report, so at that point getting a new loan will be extremely difficult.

    The lawyer is concerned with the here and now and thinks its not a big deal. I think it's important to be educated and know what your getting yourself into.

    Anyone have any experience with this in the past? Were you able to rent or get a new mortgage without a lot of difficulty? Your feedback is appreciated.
    I can only think of this in practical terms.

    Make your payment and keep copies of checks, keep reciepts of house payments and stay current all the time.

    Years from now you can explain the BK away and prove to a new lender or a new landlord that irrespective of the credit report you have always paid your mortgage.

    I think that the risk of reaffirming in this economy is dangerous and is riskier than the alternative.

    Besides, maybe you will want to stay in the home. I sure as heck am not going to reaffirm.
    Very fortunate in the grand scheme of things but have learned my lesson.

    Filed 12/15/08, 341 1/12/09, Cont to 2/12/09, cont to 3/12/09, cont to 4/15/09, cont to 5/11/09, cont to 6/02/09. Discharged 9/16/09, Closed 10/23/09

    Comment


    • #3
      Originally posted by amei View Post
      I spoke with the attorney and right now due to a huge SBA loan, its best not to reaffirm, however the goal is to stay in the house for a few years, let the kids finish high school (there is an interest only first mortgage) and then at that point buy another house and walk away if necessary as the mortgage debt is never reaffirmed.

      My concern is that based on my understanding there will be no mortgage or rent shown on the credit report, so at that point getting a new loan will be extremely difficult.

      The lawyer is concerned with the here and now and thinks its not a big deal. I think it's important to be educated and know what your getting yourself into.

      Anyone have any experience with this in the past? Were you able to rent or get a new mortgage without a lot of difficulty? Your feedback is appreciated.
      I can only think of this in practical terms.

      Make your payment and keep copies of checks, keep reciepts of house payments and stay current all the time.

      Years from now you can explain the BK away and prove to a new lender or a new landlord that irrespective of the credit report you have always paid your mortgage.

      I think that the risk of reaffirming in this economy is dangerous and is riskier than the alternative.

      Besides, maybe you will want to stay in the home. I sure as heck am not going to reaffirm.
      Very fortunate in the grand scheme of things but have learned my lesson.

      Filed 12/15/08, 341 1/12/09, Cont to 2/12/09, cont to 3/12/09, cont to 4/15/09, cont to 5/11/09, cont to 6/02/09. Discharged 9/16/09, Closed 10/23/09

      Comment


      • #4
        When we met with our lawyer for our first meeting he said we had to reaffirm or let the house go. Has anybody else ever been told this or is this just a local issue?

        Comment


        • #5
          Planning to stay. But you never know how circumstances will change. Reaffirming doesn't make sense at all in this situation, particularly with the SBA thing looming. No intentions of doing so. The fact that there is an interest only on the first that ends when the kids graduate highschool is what brings up the thought about what to do at that point if there is no "mortgage or rental credt."

          Your suggestion was a good one. Thanks.

          Comment


          • #6
            Reaffirming or let go

            The lawyer told us as long as the payments are made, that they had to honor the terms of the original mortgage. Even if its not reaffirmed. Not sure if that's a federal or state thing though.

            Comment


            • #7
              Originally posted by eddiep View Post
              When we met with our lawyer for our first meeting he said we had to reaffirm or let the house go. Has anybody else ever been told this or is this just a local issue?
              There seems to be a real difference of opinion on this.

              I have seen several replies that say that you can reaffirm anytime before the discharge.

              I have also seen that as long as you stay current they cannot foreclose.

              I WOULD reaffirm if it was a certainty that they might foreclose irrespective of my situation but it seems SO unlikely that any bank would take action on a current loan.

              Is there a definitive answer on this question from a legal not practical perspective?

              My second with Wells fargo sent me a reaffirmation letter early on. My attorney said not to sign anything unless they pressed. They have not followed up but i am only one month behind on them.

              My first is with Wachovia, essentially Wells fargo and they have never said a word.

              In fact I spoke to them today and let them know I was waiting for my discharge. They said that when I get it they would work with me on a modification.

              That's why I am so intersted in a discharge date.
              Very fortunate in the grand scheme of things but have learned my lesson.

              Filed 12/15/08, 341 1/12/09, Cont to 2/12/09, cont to 3/12/09, cont to 4/15/09, cont to 5/11/09, cont to 6/02/09. Discharged 9/16/09, Closed 10/23/09

              Comment


              • #8
                Jazz
                You were able to talk with your bank? Did the stay get lifted?

                To clarify my lawyer said I HAVE to reaffirm if I want to keep the house. Do you think this is something specific to my local bk court rules? It seems everbody here says not to reaffirm and their lawyers advise against signing but my lawyer said the opposite. I'm not sure why.

                Comment


                • #9
                  Originally posted by eddiep View Post
                  Jazz
                  You were able to talk with your bank? Did the stay get lifted?

                  To clarify my lawyer said I HAVE to reaffirm if I want to keep the house. Do you think this is something specific to my local bk court rules? It seems everbody here says not to reaffirm and their lawyers advise against signing but my lawyer said the opposite. I'm not sure why.
                  Hi, they never applied to lift the stay and have been quite for the 6 months since I filed, not a peep.

                  Yes, it is confusing.

                  The question about whether it is a local rule or not is a good one. Does anyone here know how one would find out?
                  Very fortunate in the grand scheme of things but have learned my lesson.

                  Filed 12/15/08, 341 1/12/09, Cont to 2/12/09, cont to 3/12/09, cont to 4/15/09, cont to 5/11/09, cont to 6/02/09. Discharged 9/16/09, Closed 10/23/09

                  Comment


                  • #10
                    I know when we signed our Agreement with our Attorney his fee included 2 Reaffirmation Agreements. I haven't discussed this issue with him, yet, as we are not filing until 9/30/09.

                    I did find the following. Content copying of the below Article is not allowed. So here is the URL:

                    http://www.usdoj.gov/ust/eo/ust_org/...fo_english.pdf

                    On Page Two it specifically states that Reaffirmation Agreements are not required by bankruptcy law or by any other law.

                    I have mixed emotions about this as our State's (Arkansas) Real Estate did not depreciate a large amount. We closed on our home 12/20/07 & looking at realtor.com, comparing prices sold & the 3 homes on just our street listed on the market in the past week, our home has depreciated less than $10,000. I know the 3 homes will not sell for listing price, but thought I would include them. If I don't use the 3 that just went on the market, depreciated value is around $15,000. They are still building new homes in our subdivision.

                    Luci

                    Comment


                    • #11
                      I know this might sound weird but I want to reaffirm my mortgage. Since I have not paid anything on my cc in 8 months I will need this to rebuild my credit and I need the security. I need to know that the bank cant mess with me at some future date, I just don't trust them to do anything other than look out for themselves. I am afraid that 15 20 years down the road if they would somehow benefit from calling in my mortgage,they would not hesitate to do it. Just the thought of having to defend myself while I'm an old lady makes me nervous. Right now my mortgage is less than 31% of our income so I feel secure in our ability to pay, I love my house, and my house is worth slightly more than I owe so if the housing market has already hit bottom there is no place to go but up right? So I think we will reaffirm either way.

                      Comment


                      • #12
                        Originally posted by LuciluS View Post
                        I know when we signed our Agreement with our Attorney his fee included 2 Reaffirmation Agreements. I haven't discussed this issue with him, yet, as we are not filing until 9/30/09.

                        I did find the following. Content copying of the below Article is not allowed. So here is the URL:

                        http://www.usdoj.gov/ust/eo/ust_org/...fo_english.pdf

                        On Page Two it specifically states that Reaffirmation Agreements are not required by bankruptcy law or by any other law.

                        I have mixed emotions about this as our State's (Arkansas) Real Estate did not depreciate a large amount. We closed on our home 12/20/07 & looking at realtor.com, comparing prices sold & the 3 homes on just our street listed on the market in the past week, our home has depreciated less than $10,000. I know the 3 homes will not sell for listing price, but thought I would include them. If I don't use the 3 that just went on the market, depreciated value is around $15,000. They are still building new homes in our subdivision.

                        Luci
                        Wow, thanks so much. I actually stated in my petition that I WAS going to reaffirm the house debt but now I am thinking differently.

                        I will be able to make house payments once my other debt is discharged so if as long as i am current there is no danger of losing the house why sign?
                        Very fortunate in the grand scheme of things but have learned my lesson.

                        Filed 12/15/08, 341 1/12/09, Cont to 2/12/09, cont to 3/12/09, cont to 4/15/09, cont to 5/11/09, cont to 6/02/09. Discharged 9/16/09, Closed 10/23/09

                        Comment


                        • #13
                          Originally posted by eddiep View Post
                          I know this might sound weird but I want to reaffirm my mortgage. Since I have not paid anything on my cc in 8 months I will need this to rebuild my credit and I need the security. I need to know that the bank cant mess with me at some future date, I just don't trust them to do anything other than look out for themselves. I am afraid that 15 20 years down the road if they would somehow benefit from calling in my mortgage,they would not hesitate to do it. Just the thought of having to defend myself while I'm an old lady makes me nervous. Right now my mortgage is less than 31% of our income so I feel secure in our ability to pay, I love my house, and my house is worth slightly more than I owe so if the housing market has already hit bottom there is no place to go but up right? So I think we will reaffirm either way.
                          Although I am not planning on reaffirming your post brings allot of new thoughts and concerns to mind.

                          Having that piece of mind if you are not moving and have some equity makes reaffirmation attractive.

                          I am however still in a very steep learning curve on this subject.
                          Very fortunate in the grand scheme of things but have learned my lesson.

                          Filed 12/15/08, 341 1/12/09, Cont to 2/12/09, cont to 3/12/09, cont to 4/15/09, cont to 5/11/09, cont to 6/02/09. Discharged 9/16/09, Closed 10/23/09

                          Comment


                          • #14
                            Originally posted by Lajazz947 View Post
                            Although I am not planning on reaffirming your post brings allot of new thoughts and concerns to mind.

                            Having that piece of mind if you are not moving and have some equity makes reaffirmation attractive.

                            I am however still in a very steep learning curve on this subject.
                            I currently have equity in my house. My attny said not to reaffirm although I want too. He put on the petition not reaffirming. ??? I believe you pay, your equity, your house?

                            Comment


                            • #15
                              Originally posted by eddiep View Post
                              I know this might sound weird but I want to reaffirm my mortgage. Since I have not paid anything on my cc in 8 months I will need this to rebuild my credit and I need the security. I need to know that the bank cant mess with me at some future date, I just don't trust them to do anything other than look out for themselves. I am afraid that 15 20 years down the road if they would somehow benefit from calling in my mortgage,they would not hesitate to do it. Just the thought of having to defend myself while I'm an old lady makes me nervous. Right now my mortgage is less than 31% of our income so I feel secure in our ability to pay, I love my house, and my house is worth slightly more than I owe so if the housing market has already hit bottom there is no place to go but up right? So I think we will reaffirm either way.
                              I agree. DH and I are in our middle 50's. We closed on our home 12/20/07 & intend for it to be the last home we live in. Next place will be Heaven

                              I, also, need the reassurance of credit building. By the time we file on 9/30/09we will be around 11 mths. past due on most all of or credit cards. We are current on the Mortgage and DH's truck.


                              We bought Dh's used truck in 4/07. It is a 2006 Dodge Dakota & he fits in it. Only has 34,000 miles. DH is 6'6" tall & cannot fit in all vehicles. We are upside down because we took out a 4 yr. warranty & financed it. I'm still struggling with the reaffirmation on this vehicle. We traded in a 2002 Chevy Silverado 4x4 that was Loaded. When gas prices skyrocketed & we no longer pulled a large camper, I wanted to get rid of it. I couldn't get in the passenger side of the Chevy after becoming disabled.

                              I plan on discussing Reaffirmations in detail with our Attorney. I question whether Affirmations might be required in our area and want his opinion of Pros & Cons, as his price includes 2 reaffirmation agreements.

                              Also, I want to discuss our medical health as we both are Walking Medical Patients. We have spent between $10,000 - $15,000 in medical expenses on our tax returns from 2003-2008. We thought 2009 would be a better year. So far, from Jan-May we've spent $10,000 on such expenses.

                              Luci

                              Comment

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