mortgages not reporting correctly

[halomom]

Hello Everyone,

I discharged in May 2008 and closed in January 2009. I pulled my credit reports and all the credit card info is correct, but my mortages have issues.

All the reporting agencies have my first and second mortages as being included in the BK, and they never were. I have been paying on them according to original terms, and obviously would like that reflected on my record. The first mortgage has all the amounts, balance, monthly payment amount, etc as zero and just says "included in bankruptcy."

Meanwhile, my second mortgage is also zeroed out but has "charged off" written on it. When I called Wachovia they said that when I got a month behind they weren't allowed to contact me since I was in BK, so they just charged it off. They also said it was too bad my lawyer hadn't told me to sign a reaffirmation, but since they didn't know if I was planning on keeping my house they just charged it off. And, oh, that it was permanant and couldn't be changed. Once again, I am still paying the original terms and would at least like something on my report that shows I am paying according to terms and in a timely fashion.

If anyone had a similar problem how did you fix it? Did you try to dispute it since you are still paying, or did you ask them to file a statement with the account info, and if you did, how did you phrase it?

As always, thanks for you help!

[HHM]

Sorry to say, the first mortgage is being properly reported. A chapter 7 discharges your personal responsibility for the debt. A secured debt creates 2 types of liability (1) the security interest; the security interest is what gives the lender the right to foreclose for non payment, (2) Your personal promise to pay the debt. This type of liability is your personal promise to be responsible for the debt if the value of the security interest is less than the loan value. Bankruptcy discharges your personal liability, but does not discharge the security interest. Thus, to keep the house, you need to keep making payments, but since you have discharged your personal liability, that fact gets reflected on your credit report. Your credit report is a report of your "personal" liabilities, it is not a report of your homes security interest.

As to the second, if the charge off happened before the BK, it can stay, but the notes should say included in BK. If the charge off happened after the BK, then the charge off entry should be removed.

You can try to dispute it, but the lenders are properly reporting your mortgage payments.

[halomom]

Thanks, HHM. The charge-off on the second mortgage was after the BK so I will definitely pursue having that changed.

I am also in the process of a workout agreement with the mortgage holder. (They have all my documentation and I'm in the pipeline but are so swamped they haven't gotten back to me with exact terms yet.) If a refi goes through would I then start off fresh with a new loan that would be reported to credit bureaus?

[HHM]

If you get a true refinance and not simply a modification, then that new mortgage is a post bankruptcy debt and will help rebuild your credit. A true refi will require a closing.