Can 1st Mortgage Holder Assess Late Fee After Discharge

[2manybills]

Does anyone happen to know the Federal Code that provides that a 1st Mortgage or 2nd mortgage holder cannot assess late fees, if you do not reaffirm, once the debt has been discharged? My 1st mortgage holder is trying to assess late fees of $120 for a 2 day late payment.

[sunshinepa]

That's a good question, hope some of the "experts" reply as I am interested in the answer. I didn't reaffirm either, don't expect to be late but life is full of unexpected events so I am curious too.

[2manybills]

It was one of those flukey things where I thought I completed the transaction on line, and I didn't. My attorney is supposed to send me the Code, so when he does I will post, but I will love to hear in anyone else has had this situation come up. They no longer report on your credit report that you're complying with the terms of your loan, so why should they be able to assess charges, when technically the loan is discharged.

[sh9730]

Well, the only thing is that remember, that technically you are already likely in "default" of the loan when you filed BK. They are not FORECLOSING since you are continuing to pay, but my guess is (Im not 100% sure of this mind you) that if you make things tooo difficult for them, they can go ahead and begin foreclosure proceedings.

Yes, you do not have to PAY the bill....but my belief is that they really can foreclose on their property any time they want after a BK...they are just choosing not to since you are paying and they would rather have the money than the house......but they COULD!

[2manybills]

Well, the only thing is that remember, that technically you are already likely in "default" of the loan when you filed BK. They are not FORECLOSING since you are continuing to pay, but my guess is (Im not 100% sure of this mind you) that if you make things tooo difficult for them, they can go ahead and begin foreclosure proceedings.

Yes, you do not have to PAY the bill....but my belief is that they really can foreclose on their property any time they want after a BK...they are just choosing not to since you are paying and they would rather have the money than the house......but they COULD!

No, I was not in default on the loan when I filed. Also, have never been more than 16 days late (which is where the late fee comes from). I have continued to pay my 1st mortgage continuing. I really don't see them foreclosing on my property for $120 late fee.

But technically, and I'm not sure, assessing a late fee on a discharged debt is an attempt to collect a debt.

[sh9730]

No, what Im saying is that most mortgage loans have a provision that filing BK - IS A DEFAULT - in and of itself. I realize there is some debate on this....but my view is that if a bank really wanted to they could foreclose after a BK even if you are CURRENT, unless you reaffirmed. Some believe that merely filing a BK is NOT a material default according to state FC laws. Im not so sure and it is just that it hasnt been tested yet since the banks dont want any houses they are getting paid on.

[Pandora]

My understanding on how a retain and pay works after discharge is you must abide by the terms of the contract - regardless of discharge - if you want to remain in the home. Paying past the grace period results in late fees that can be assessed and must be paid according to the terms of the org. contract.