Reaffirm mortgage or not to?

[buzzstpoint]

I have many questions on reaffirming a mortgage.

In Simple terms what does it mean?

here's the deal
67900 owed on the house
Fair market value is 68600
This was a 0% down WHEDA loan.
Paid on time and never late for the 4.5 years we've had it.

I want to keep the house. But I've been reading not to reaffirm.
If we don't reaffirm can they take my house? Foreclose? (Thought I read WI had a 75000 exemption)
If I still make my payment do i own the house? Can they come after the house lets say in 2-3 years? What happens in 25 years when I'm done paying? Is the house the Banks or mine?
lastly, lets say in 10 years, we fall hard again and want to give up the house, Can we at that point walk away with no consequence? What if I make a late payment? Can they now grab my house from me?

Oh, one more, Can the bank change the terms of the contract, say for example, add PMI or increase the interest rate?

Sorry for so many questions. But I'm sure i'll have more..

PS: (2 free consultations today)

[btbeme]

Your free consultations will probably tell you this, or something like this:

If you absolutely want to make sure you keep something AND you are absolutely sure you can afford to do so, then reaffirm.

There are some big advantages to NOT reaffirming, however. The biggest advantage is that you will not be held legally liable for any deficiencies if you later decide to walk away.

If you do not reaffirm, it is almost impossible for a bank to take anything away from you as long as you stay current on the loan. Doing a "pay and stay" will generally have no ill effects as long as you stay current. However, the bank will usually NOT report your on-time payments to your credit report unless you reaffirm.

[NoMoreCards]

If you absolutely want to make sure you keep something AND you are absolutely sure you can afford to do so, then reaffirm.

Keep in mind, that something may happen in the future where you may not be able to afford the home. However unlikely, it can and does happen. People have posted on this site about doing a reaffirmation and then losing their jobs or facing medical hardship where they could no longer afford the payments. By not reaffirming, you still have the option of walking away. Those that reaffirmed are liable for the deficiency.

The best option for most, is to keep their options open by not reaffirming and continuing to pay.

[justbroke]

I would never reaffirm just for credit reporting. There is almost no plausible or beneficial reason to reaffirm a mortgage. The only thing you lose is reporting. However, all your "good" reporting is already on your credit report and you can ALWAYS have any underwriter update your credit profile manually during desktop underwriting.

As posted above, I too have read WAY TOO MANY cases where people come to BKForum, asking how they can get out of a reaffirmation of a mortgage after they lost their job and can't pay. Unfortunately, job loss happens more than people realize... especially the people, like me, who have been with the same employer for 12+ years. It happens.

In my opinion, reaffirmation does NOTHING for the debtor. What it does do, is make you responsible for at least another 8 years (before you could ever file another Chapter 7).

[buzzstpoint]

we had 2 free consulations.

the 1st meeting went real well. We both liked this guy, answered all of my questions and will work with us on his fees.
How ever, he is a strong believer in re affirming the house. He said that if you can pay for it, secure it. This way the bank doesn't have any reason to come after you.

The 2nd guy we didn't' like very much, Way to laid back. Almost seemed like he wasn't interested. Seen all of our paper work we did so far and pointed out to us that since we have it "together" and our CH 7 is a simple and slam dunk case we could file yourself. Said it's just a lot of paper work. As for re affirming the debt, wouldn't give us a straight answer. Said ti was up to us. .

Now it's just convincing my wife about the reaffirmation. I tried to explain it to here but she was cold hard paper facts.

We are totally willing to pay for this lawyer but now that I'm sitting down looking at Pro Se, I'm wondering if I should go that route...

[jostby]

At the top of the "stickies" in this CH7 forum there is 12 pages on why reaffirming is a bad idea. Have your wife read those. My attorney also wouldn't give advice either way before I gave my decision. After I said "no", he said that he believed that to almost always be the best answer.
He also said the bank can't take your house unless you default. And they must give you title after you pay it off. And in my case we want the house but the bank wouldn't because we are under water with it and they would never be able to get rid of it.
Good Luck.

[buzzstpoint]

That sounds like our home case.

The fair market value from the beginning of the year is about 900 more then the mortgage we pay. Over the past few years I have seen the assessment drop. At current rates if we had an assesment now, we'd probably be even with our mortgage or under water.

[Scooter10]

Do not reaffirm. Go to the us bankruptcy court webpage and review reaffirmations, even they discourage it. many courts will make you have a special hearing just for the reaffirmation becuase it is that big of a deal and there can be serious consequences. bk is a life event and there is nothing worse than if you were to file bk, go on for 5-10-15 years, having another life event where you can not pay the mortgage, the lender can sue you and garnish your wages. Then your forced to pay or file bk again. Hopes this helps.

[btbeme]

That sounds like our home case.

The fair market value from the beginning of the year is about 900 more then the mortgage we pay. Over the past few years I have seen the assessment drop. At current rates if we had an assesment now, we'd probably be even with our mortgage or under water.

If you think you may be under water, consider the cost of actually marketing and selling your property in this declining market. Should you need to unload a house in a hurry (say, 3 months or less) you would get well less than market value in most instances.

That being said, it is my firm belief that reaffirmations are very counterproductive to Life After Bankruptcy. The only exception would be something you are very close to paying off in full and have most of the cash in hand to do so.