Lawyer says don't reaffirm the mortgage

[toomuchdebt1]

We want to keep the house, we have worked blood, sweat and tears on this place. We cannot not rent a house and farm land around here for the same amount of our mortgage payment or less. GMAC is the lender. I'm worried that some day, they'll decide to take our home, after we pay off a good amount. If we don't reaffirm, are we basically just renting? Do we need to buy this place again with a different lender?

[LimpDisc]

What would they have to gain by taking your house if the payments are current? You are still the homeowner. It's not like they get to keep the profit after selling the place. They want you to stay in that house and make the payments on time over the length of the mortgage.

[toomuchdebt1]

If we don't reaffirm. Can they change the term, like higher interest rate or anything like that? We have a fixed rate.

[StartingOver08]

No, they can not change the terms as long as you pay as agreed in the note and mortgage.

[dspii]

If you continue to pay as agreed, they cannot foreclose on you. The benefit against signing a reaffirmation agreement is that if your situation turns to poop, you can walk away from the property and never owe another dime...it was discharged in bk.

On the other hand...if you sign, and things turn to poop, you will be foreclosed on, owe the difference between the note and auction price and you can never bk the property or debt owed on it. This is why lawyers generally shy away from reaffirmation agreements.

But if you don't sign, they will likely not report your excellent payment history to the BIG 3 credit bureaus, or give you online access for bill payment. I believe this is a fair exchange, you can still sell it if needed in the future and turn a profit. There are great posts on how to rebuild your credit to include home purchases.

The key is make your payments as agreed, if your underwater you may want to reconsider keeping the property.

[iv65536]

My thinking on the subject is that it leaves many other options on the table, perhaps along the lines of using the discharge as leverage to force the lender to agree to a principal and/or interest rate reduction after the discharge. I am thinking along the same lines in my own situation to dispose of a second mortgage. I think they will accept my offer rather than cut off their nose to spite their face..

[2manybills]

My mortgage is with GMAC also. They have been fine. In fact, they still allow me online access for my mortgage, so I am grateful for that.

I am also going to trying to renegotiate my HELOC with Wells now that I am discharged. Not sure if it will work, but I have heard that they are accepting 15 cent on the dollar.

[CCsAreEvil]

Dang. I think I'll "walk away" (when it's the right time to) since my 2nd would settle at around 17k based on that... just doesnt seem "worth" it. :| In the meantime, gotta keep the 2nd lienholder happy with the 300 monthly payments.