To reaffirm home or Not reaffirm Mortgage

[lillaimof2kids]

Here is my concern.
Right now, clearly, no bank wants to own more empty homes.
But what happens in 5-10 years? Let's say the market rebounds, and your home that was barely worth what you owed, or worth less, now has plenty of equity?
Then, can the banks go through their files of people who filed BK and did not reaffirm and start cherry picking which properties they want back??? Even if you have always been current? It seems grossly unfair but also seems entirely possible.
Just a thought.

I do have the same concerns as you! Here's my thinking...
If my state, Ohio, had a law saying we HAD to sign a reaffirmation (which there is none) to keep a piece of property that would be a completely different story. My 1st mortgage does not do reaffirmations, my 2nd mortgage submitted a reaffirmation I refused to sign. The 2nd mortgage bank would have to have grounds to foreclose on me. There's nothing the says I HAVE to sign a reaffirmation. I'm honoring our original terms and conditions. My 2nd mtg. bank is reporting my payments to the credit bureau with a balance reported. I'd say they've accepted my ride through since they report "paying as agreed" on my credit report.

[gymbo]

Here is my concern.
Right now, clearly, no bank wants to own more empty homes.
But what happens in 5-10 years? Let's say the market rebounds, and your home that was barely worth what you owed, or worth less, now has plenty of equity?
Then, can the banks go through their files of people who filed BK and did not reaffirm and start cherry picking which properties they want back??? Even if you have always been current? It seems grossly unfair but also seems entirely possible.
Just a thought.

[r.m]

If the day after my bankruptcy ends I get in a car accident and die my wife is not stuck with the debt because she has to wait 7 years to file again.

If this is your main concern, that if you die or are disabled, your wife would be stuck with the debt, then get some life and disability insurance.

If I'm getting this right, you're current.

While the "lenders don't want your home" line is untrue (the truth is they don't care one way or another), it's highly unlikely Wells is going to be instructed to begin foreclosure because you didn't re-affirm... in MICHIGAN!

Now, should you subsequently default, then it could get a little tricky trying to do anything but a full re-instatement, but that depends on a whole host of other factors.


You're acting like a "maximizer" when you should be a "satisficer."

Google those terms if you'd like further explanation.

Bottom line, you're torturing yourself with "what if's."

Stop it!

There is no "perfect."

Make your best decision with the info you have, and get on with the business of getting back on your feet and moving forward.

Best of luck.

[HHM]

HHM - you are talking about a home mortgage not being reaffirmed. What about cars? If you have never been late and did not reaffirm?
Are they likely to take them anyway, (with almost no equity in them)?

Same rules apply...a failure to reaffirm is not a default under state law such that the car company can repo simply based on the failure to reaffirm.

[PoorGrammyinBK7]

The key is, you have time. You can reaffirm at any point before discharge.

If it were me, I would wait and see if the lender does anything. If they file a motion in your BK, THEN you can reaffirm. No need for you to make the first move.

If the lender does not file anything in the BK, and you get your discharge, the lender cannot foreclose based solely on the fact that you failed to reaffirm. (just keep making your monthly payments on time and in full).

HHM - you are talking about a home mortgage not being reaffirmed. What about cars? If you have never been late and did not reaffirm?
Are they likely to take them anyway, (with almost no equity in them)?

[Mi Bankruptcy]

Talking to my attorney he said they don't allow "ride through" anymore. He said at one point it was something they used to recommend. But, they no longer recommend it. He said lenders are getting more aggressive even if you have never been behind. So, he pretty much scared my wife.

Our house payment is low compared to our income. My attorney was quite impressed at how low our house payment was. So, I'll reluctantly reaffirm the loan. My wife would still not be able to rent a home/ apartment for our currently monthly payment if something did happen to me.

[laurannm]

I don't believe not reaffirming voids the contract. The terms of the loan still exist

[lillaimof2kids]

Our 2nd Mortgage lender wanted us to reaffirm. Our attorney tried to tell us we HAD to sign or they would foreclose on us...I refused. For me, it was the dumbest thing I'd ever heard of...it made no sense.

[b_girl]

I agree. Despite our attorney's advice we still waited to reaffirm our home because I was firmly in the ride through camp. The lender filed a motion about 30 days after the 341, so we knew they were going to be aggressive.

[HHM]

The key is, you have time. You can reaffirm at any point before discharge.

If it were me, I would wait and see if the lender does anything. If they file a motion in your BK, THEN you can reaffirm. No need for you to make the first move.

If the lender does not file anything in the BK, and you get your discharge, the lender cannot foreclose based solely on the fact that you failed to reaffirm. (just keep making your monthly payments on time and in full).

[b_girl]

Yes, Mi, they could come after the house, and it seems to depend on your area. That's where you need to check with your lawyer as to what is prevalent in your area. I was all gung ho to not reaffirm our home, based upon what I'd read here, but our attorney warned us that it would not work in our area and I believed him...as it turns out, I think he was absolutely right, based on the subsequent actions of our lender. Do I worry about re-affirming? Course I do...my husband is the bread winner and if anything were to happen to him in the next few years, I would be screwed. However, if he dies, I'm covered because he has a sufficient life insurance policy to cover the mortgage. If he's disabled, well, his work offers disability insurance and we are investigating adding this to his benefit package.

By the way, I wanted to rent, but my husband absolutely refused to do so...he is firmly in the 'own your own home' camp. I finally agreed with him because 1)we owe what our home is worth and 2) our payments are really really low ($288/mth). If you owe more than your house is worth and the payments are a burden, I would not reaffirm and would let it ride IF your attorney indicates that it is a commonly allowed practice in your area. Remember, ride throughs are not the law...it was wiped out in the 2005 BK redo...but many are still successfully exercising this option.

[PoorGrammyinBK7]

We did not reaffirm anything. My attorney said it may be possible for them to try and take the house if ultimately we should get behind in payment - but he doubted they would do so as long as you are current. He said in 25 years he has always recommended not reaffirming and in none of his cases has a lender tried to take the house from the owner as long as they are paying and on time with payments.

Now we are discharged so I guess we will see! Nothing so far though....

The cars may be another story, because the law does say you have to reaffirm or surrender or redeem when it comes to "personal property". But I really don't see how it would be advantageous to the lender to repo these 2 cars when we are, and always have been, current -- and it is very unlikely that they could get anywhere close to what we owe on them in an auction format.

[Mi Bankruptcy]

Yes, that makes sense.. However, I am concerned that if I don't reaffirm the mortgage then the contract is void because I included them in bankruptcy even though I plan on keeping the home. Again my whole point is.. If the day after my bankruptcy ends I get in a car accident and die my wife is not stuck with the debt because she has to wait 7 years to file again.

The base question.. If I don't reaffirm during bankruptcy is it possible for them to take the home? I know it's unlikely since we are making payments on time and have never missed a payment.

[AngelinaCatHub]

I guess that is what I am concerned about. If you don't reaffirm they could kick you out? Does not reaffirming a mortgage give power to the Wells Fargo to foreclose on my home at anytime even though I have never been late or missed a house payment? Additionally, if I stay in my home for another 15 years and want to sell even though I owe money.. Is it my home to sell because I did not reaffirm the mortgage?

[AngelinaCatHub]

What I don't understand is the ramifications or possible concenquences that could derive from not reaffirming more concern for the homes rather than the house. I originally told my attorney I intended to reaffirm my cars and homes. Additionally, is the Trustee concerned that I am reaffirming.

For instance we know mortgages don't want homes. However, my house is continuing to appreciate. My taxes & insurance is in escrow. I assume if I don't reaffirm this will be affected?? True? not true?

Nobody wants your house or cars, they want your money. Pay through is safer and as long as you keep those payment current, no mortgage company will take them away or forclose. If they do, they just have another "white elephant" that needs to be watched and protected from looters.

If you pay through the advantage is, if something in the future happens, you can let the items go without a Judgment. 'Hub