Re-affirming house, not re-affirming...

[DEBTCHAINS]

Hi Everyone,

I've brought this up before, and have asked my attorney, but while I wait on him to answer, thought I'd ask other experts here.

We're probably even on our home if you count the first only. Throw in the second, we're upside down 60k.

Attorney says they never recommend re-affirming, and that they won't do anything as long as we keep paying our mortgage. We are doing just that, and are on time, caught up, etc. We've had our 341, (almost a month in) and are just in the waiting period now.

I guess my question is, if we don't re-affirm, and then say in 3 years the market turns, (not saying it will, but you know, just saying...) say in 3 years we have 100k in equity. Is it our home still? Or can Chase then just foreclose on it because there is value in the home to them now? I'm not sure how this works. We want to keep the home because we're not that far under, and if we do move, it won't be for another few years. We're planning to negotiate our 2nd when the case is discharged.

[2manybills]

I believe that if there becomes enough equity for it to be worth their while, they may attempt foreclosure.

I am in process of attempting settlement on HELOC with Wells. I paid on the HELOC up until Feb.

I am current on my 1st mortgage.

[blessed]

I believe that if there becomes enough equity for it to be worth their while, they may attempt foreclosure.

Do you have any proof to back up this statement?

[2manybills]

Do you have any proof to back up this statement?

No proof, only makes sense. If they can foreclose on your property and pay off the 1st and still come out with their money (or most of it), then it would be worth their while to foreclosure.

[RuthCB]

I read so much here about not reaffirming. I do plan to reaffirm because I want to stay in my house. I can afford the payments. My lawyer said it would be better for my credit in the long run. LOL - and I'm with HFC, and I don't trust them not to do something hinky.
The interest rate isn't good, but not horrible (6.28)

[DEBTCHAINS]

after a bit of research, I do NOT believe that's the way it works. I think you get to keep the title of the house, and any equity you were to make is yours.

From what I've read, the only negative to not reaffirming the home would it would not reflect or help you build credit, because you are not responsible to pay it.

To me, that FAR outweighs the risk of losing a job or something catastrophic happening where I couldnt' afford the home and still be liable. I'll wait for my lawyer to confirm, but to me, if this is the case, it's a no brainer to not reaffirm.

[blessed]

No proof, only makes sense. If they can foreclose on your property and pay off the 1st and still come out with their money (or most of it), then it would be worth their while to foreclosure.

I'm sorry but if that were the case then all of our attorneys would be advising us to reaffirm, or at minimum warning us of this risk. I doubt a mountain of legal mess is "worth their while" for banks to take people's homes for no reason. Doesn't makes sense to me.

[upward]

We did not reaffirm and am so glad. We continue to make the payment and have been for the past two years. We are currently trying to settle with the 2nd with Wells. We owe them 70k and have no equity in the home. I am just glad to know that if for some reason I had to walk and had no equity I could and I am not responsible. If I am late they cannot report it on the credit report because it is discharged. Do not reaffirm ! That is what our lawyer advised. I would really think hard about it, especially in this economy!

[RuthCB]

We did not reaffirm and am so glad. We continue to make the payment and have been for the past two years. We are currently trying to settle with the 2nd with Wells. We owe them 70k and have no equity in the home. I am just glad to know that if for some reason I had to walk and had no equity I could and I am not responsible. If I am late they cannot report it on the credit report because it is discharged. Do not reaffirm ! That is what our lawyer advised. I would really think hard about it, especially in this economy!

Each circumstance is different. I am reaffirming because I do have equity in the house and it has increased in value. Our area was not hit by the housing crash.
Additionally the equity doesn't impact the BK case because in my state, the homestead is exempt no matter how much value or equity it has.

[helpmeout]

I'm sorry but if that were the case then all of our attorneys would be advising us to reaffirm, or at minimum warning us of this risk. I doubt a mountain of legal mess is "worth their while" for banks to take people's homes for no reason. Doesn't makes sense to me.

For no reason? You not paying the 2nd mortgage is reason. And when there is enough equity in the house to cover the first and legal expenses, the 2nd will go after the house. Legally. The only exception to this is if the same bank holds the first and the second. Then the bank will probably not wait until the equity increases.

You may be able to get them to settle for a fraction of what you owe, but you need to make sure that they release the lien.

[2manybills]

For no reason? You not paying the 2nd mortgage is reason. And when there is enough equity in the house to cover the first and legal expenses, the 2nd will go after the house. Legally. The only exception to this is if the same bank holds the first and the second. Then the bank will probably not wait until the equity increases.

You may be able to get them to settle for a fraction of what you owe, but you need to make sure that they release the lien.

Thanks helpmeout. That was my point. I have not reaffirmed my mortgages, but I continue to pay on my first and work on settling my second, which is underwater. But if my 2nd were not underwater, I would sure as heck being making that payment also if I did not want them to foreclose.

And Debtchains, since I know your attorney, I can bet that he will tell you not reaffirm.