Loan Modification of Mortgage Q

[willsurvive]

Hi,

We are currently in CH7, 30 days after 341 and awaiting discharge. We have permission from our attorney to talk to our lender about a possible loan modification of our mortgage. I am not sure where the road will end at this point, but we are realizing without a loan mod, financially, we probably should not stay here. Anyway, my question is this: if we do get a loan modification after bankruptcy discharge (will not sign reaffirmation agreements) do we now become legally tied to the property again? Meaning, instead of being able to walk away at any time (because we didnt' reaffirm) are we now legally bound to the loan modification terms and can only sell the house or foreclose with a deficiency judgement possible?

Thanks!!!

[HHM]

That is a difficult question to answer in the abstract here.

I would say, unless the loan mod is a refi, then you would NOT be personally liable in the future if you had to walk away after doing the loan mod.

Right now, the modifications being offered are not that great, they are really only addressing temporary missed payments. If you have more than 15% negative equity in the home, I would walk away.

[willsurvive]

Well, I definitely won't accept anything unless it's a great deal. Right now we are looking at a modification that will reduce the payment by $500 which would help a ton. Again, I'm not sure where it will end but we are looking into it.

Oh and fortunately, our home values haven't been hit quite as bad as some areas of the country.