Filed BK7 in 2006..did not reaffirm mortgage..can late charges be accrued??

[gacreditguy]

Wierd question I know, but wanted your thoughts here. I filed CH7 BK in Jan 06 and was discharged Jun06. I did not reaffirm the mortgage with GAMC and have been paying ever since.

However, they were reporting to the CRA's up until Feb of this year when I called them out on it and they IMMEDIATELY listed as IIB and removed any comment relating to a late payment, etc.

Can the mortgage company charges late fees to an account after BK7 and no reaffirmation agreement?

[UpaCreekinCA]

They can probably charge late fees if you indeed late with payment, they just can't report you were late. Most mortgage companies stop reporting payments after you file anyhow because the stay. If you did not reaffirm, they technically don't have to report anything to the CRAs.

[tcreegan]

Gmac

Hello gacreditguy,

Good luck dealing w/ GMAC......I spent 6 months going around and around w/ them and finally gave up.....

According to some caselaw I have read, if you stay current you are "performing" on the contract and you and GMAC are bound by the original terms, even though you are not legally liable for the debt.

People have repeatedly posted that a lender cannot report to a credit bureau if you are not reaffirmed, but I have never heard a legal reason why they can't.....only the fear it could be construed as a violation of the BK stay.

Obviously they cannot collect pre-petition late charges, that would be a definite violation of BK law.

Good luck w/ GMAC, I hope you have a much better experience than I had !!


Tom in Colo

[Ann]

Hello gacreditguy,

Good luck dealing w/ GMAC......I spent 6 months going around and around w/ them and finally gave up.....

According to some caselaw I have read, if you stay current you are "performing" on the contract and you and GMAC are bound by the original terms, even though you are not legally liable for the debt.

People have repeatedly posted that a lender cannot report to a credit bureau if you are not reaffirmed, but I have never heard a legal reason why they can't.....only the fear it could be construed as a violation of the BK stay.

Obviously they cannot collect pre-petition late charges, that would be a definite violation of BK law.

Good luck w/ GMAC, I hope you have a much better experience than I had !!


Tom in Colo

Interesting comment about not being able to collect any pre petition late fees. I have close to $1200 in late fees attached to my mortgage loan before we filed so if I were to sell my house would those late fees need to be paid? We did not reaffirm.

[tcreegan]

no pre-petition fees

Hi Ann,

Yup, they cannot collect the pre-petition fees.....from you.

If they want the fees, they can just roll them into the price they charge the next buyer.

Tom in Colo

[tobee43]

my understanding, and we not only did NOT reaffirm, but actually surrendered the property...thereby turning over the collateral which is the ONLY possible interest the bank could have....they refuse to take the property out of our names....yet have changed the locks etc. once the trustee has close the estate, and although it's a no asset case....the property reverts BACK to us!

as in my other post i'm dealing with the fact that although they took BACK the house and they have acknowledged we no longer are financially responsible, this bank continues to go forward to foreclose....which in one way i understand because the loan is an FHA and there are procedures to follow to get reimbursed by the government. however, a quick deed in lieu would certainly be in order in this case, as there is NO more monies that the bank has to eat. FHA said this bank has not even put a claim in as yet....yet because foreclosure over 10 months ago....so they continue to rack up expenses. post bankruptcy expenses....which my attorney says i have nothing to worry about...but it still is a hassle for us to deal with them. FHA and HUD both also said this bank and another bank are BOTH notorious in doing this to people....choking people to death...since apparently taking your house, car, life savings...clothes...tv's etc was not enough??? they now what r blood and r little ss check???

these banks rule the world....and what the heck is going on with these suppose it "watchdog" government bank abuse protection...just another mirror and smoke ploy to make us THINK something is being done for us....here here...over HERE...please i could have used some of that thrown around bale out monies!!!???

[HHM]

Okay, there is a lot of misinformation on this thread, so let's clear it up.

1. You need to realize that the "loan" and the "security interest" are different things (but the terms are the same). The "loan" is discharged against the debtor, personally, but the lien stays in tact.

2. The affects of not-reaffirming.
a. If you "surrender" the house, you, personally, are not liable for any debt associated with the home (i.e. deficiency, legal fees, late fees etc).
b. If you retain and pay, you MUST be current with all obligations, otherwise you are in default, and the lender can foreclose.
For example, if you are $1,200 in last fees pre petition, you are in default, meaning they can foreclose if you don't pay it.
c. If you sell the house in the future, you will need to fully satisfy the amount owed on the house (or negotiate a short sale).

[tobee43]

hhm...i agree....

when one has surrendered the property in a chapter 7 the bank's only recourse is to take back it's collateral....that being the house itself. however, pursuant to federal order by the judge it was ordered that the mortgage debt IS discharged....yet the bank CAN still proceed with a foreclosure................

however...that being said i will reiterate while not attempting to be redundant ...when you rec'd and if and when you rec your order from the trustee approving a report of no distribution...the property does revert BACK to the you or i....there by while the mortgage has been discharged....the deed itself is still in our names. the title does not transfer until the foreclosure process is completed or a deed of lieu has been issued prior to the foreclosure process completion.

also trying to work with the lender to resolve this situation would by far be the best solution. but we all know at this point they are unreasonable, uncooperative...and downright nasty and incompetent...i.e. i spoke to a bank personal and they didn't even know what a deed in lieu was! YIKES!!!

as you can see by my discharge date..which is about a week and a half ago...i am being pro active to get this matter resolve...i want it nipped in the bud NOW...and not come back to bite us later...i will be relentless until i have completed this task...it's my life's mission..LOL!!!.....so stand back you bad bank...i'm comin for you!

[tcreegan]

speed up foreclosure?

Hi toobee43,

I too am worried about the foreclosure process taking a long time with my name still on the deed. I wish I knew a way to speed up the process......

My lender is GMAC mortgage and they are not nasty or mean, just incompetent.

My brother Ed has a saying: Never attribute to malice things adequately explained by ignorance.

Good luck and if you find a way to speed up the foreclosure process, please post it!!

Tom in Colo

[tobee43]

tom...my understanding when i spoke with HUD, that there are two banks in particular that have drug on the process needlessly...your's was not mentioned...but i saw on the threads here that GMAC was a killer as well.

in attempting to be pro active..i'm going to write the certified letter this week, both to the bank and also to HUD and FHA for fraud and misuse of funds...


as you know from another thread (the NJ fest!! LOL)...our property is IN nj...and apparently they have a "no" limit type of foreclosure fees. not that i would be responsible, but they are going to charge back an already over burdened government and charge them back. i have first hand information that some of the nj foreclosure fees have been in excess of 50-100 thousand dollars!!! and, while we personally, since the mortgage debt was discharged will not be responsible, we view it as a "misuse" of ferderal monies....all which is coming directly out of our pockets.

the bank we are dealing with is one of the "biggest and have not only nasty, but completely incompetent. i really think they "play" dumb".... even when i spoke to their attorney's office last week...our attorney has made it clear they have no way to come after us...but i just want everything behind us...it's been almost 3 years!!!

tom is your bk discharged???