Reaffirmation on real estate...urgent..help needed

[BrokeLoser]

My attorney is telling me that I shouldnt reaffirm on my mortgage where I have more than 100k in equity and always paid on time. Why would he advise me that?

Thanks

[tobee43]

because it's the right thing to do....see this sticky..: http://www.bkforum.com/showthread.ph...ry%2C+bad+idea.

it will help you understand the view

[BrokeLoser]

because it's the right thing to do....see this sticky..

it will help you understand the view

WOW...thats a lot to read through...I think I understand
So the only real upside to reaffirming a first mortgage is the help it provides in rebuilding credit?
Thanks for the link

[btbeme]

I am assuming that your exemptions will more than cover the equity in your home. Otherwise, the Trustee will seize it to pay your creditors. If you don't have a homestead filed, I'd ask your attorney about one ASAP.

Reaffirming positive equity that you can exempt and can AFFORD post-BK is a good move for your post-BK health.

I hope that is the case for you, because that is a positive upside that most people don't see after Ch 7. FYI, I think a lot of us would agree that this is one of only a very few situations when reaffirming is a good idea.

[BrokeLoser]

Yes my exemptions cover the equity. I'm still trying to figure out why my attorney thinks it's a bad idea for me to reaffirm. He says in hundreds of cases he's filed he's never reaffirmed on a mortgage.

[HHM]

I am assuming that your exemptions will more than cover the equity in your home. Otherwise, the Trustee will seize it to pay your creditors. If you don't have a homestead filed, I'd ask your attorney about one ASAP.

Reaffirming positive equity that you can exempt and can AFFORD post-BK is a good move for your post-BK health.

I hope that is the case for you, because that is a positive upside that most people don't see after Ch 7. FYI, I think a lot of us would agree that this is one of only a very few situations when reaffirming is a good idea.

I am not entirely convinced that is true. The mere act of reaffirming the loan does not automatically require the bank to report it as such. The reaffirmation agreement must specifically state that the creditor will report the account to the credit reporting agencies as if the bankruptcy never occurred. The fact is, a BK is a BK when it comes to credit after BK. The fact that you are still paying on the mortgage is of limited benefit. And for mortgage loans in particular, the broker and underwriter can do what is called a rapid re-score. A rapid re-score calculates your credit score "as if" the mortgage payments were reported. So, you don't really need to reaffirm. Your credit will recovery in about the same amount of time regardless if you reaffirm.

[despritfreya]

Yes my exemptions cover the equity. I'm still trying to figure out why my attorney thinks it's a bad idea for me to reaffirm. He says in hundreds of cases he's filed he's never reaffirmed on a mortgage.

I am sure someone directed you to the thread I started as to why reaffirming is a bad idea.

1. Since California is an anti-deficiency state, if and only if, your mortgage/Deed of Trust, qualifies for such protection, would you even consider signing a reaffirmation agreement. You better make 100% sure you would be protected if an when things fall apart.

2. As HHM points out, reaffirming has no meaningful impact on your credit score and your credit score should be the least consideration anyone uses to agree to re-obligate oneself to a long term debt.

3. You state you have not missed a payment as of now. You state that you have a lot of equity (within the homestead exemption). What makes you think your good fortune will last? No one can predict the future. The fact is, unless State law protects you from a monetary deficiency claim, reaffirming the loan is, IMHO, just plain stupid.

As an attorney, I can only give advice. If my client does not want to take it, that is their prerogative. If my client insists on reaffirming I will request that the lender supply the paperwork - it is up to the lender, not me, to generate the Agreement. I will send it to my client without comment. I will not sign the Attorney Certification. The Court will hold a Hearing and the Judge will, in a polite way, tell my client how stupid he/she is and then, 99.999% of the time, deny the Motion to approve the agreement.

Des.

[tobee43]

WOW...thats a lot to read through...I think I understand
So the only real upside to reaffirming a first mortgage is the help it provides in rebuilding credit?
Thanks for the link

it's a bit to read, however well worth it! as is the above advise given.

i would never under any circumstances after reading hundreds of threads and posts dealing with the subject matter, even one moment consider reaffirming. however, in the end, it's all a personal decision, one that only you can make.

also as hhm has pointed out, TIME is the best medicine for rebuilding your credit standing, which into today's economical credit climate is even difficult for those who have not experienced a bk or foreclosure.

as des as pointed out, as an atty, one can only give you the advise, it's still your choice whether you take it or not.

best of luck on what ever you decide!!

[buzzstpoint]

here's what I did.

When I filled out my papers, I indicated that I wanted to reaffirm, ( you are under no obligation to reaffirm just saying you have interest in doing so). My bank send me a reaffirm agreement, The Fair Market Value was listed as almost double of what the county says it is. So i called the contact number on the reaffirm papers. Along with poking around with the reaffirm I asked the policy on no reaffirming.

I too am current and never been late on a payment. When I asked the banks policy, he told me as long as you are current and pay on time, "we don't care". Which leads me to believe that the bank really doesn't want the house anyway.. So now with that knowledge I have changed my tune, and have decided not to reaffirm.

Maybe.
I'm currently at 6.25% The bank is advertising 3.99%. I'm going to talk with the loan officers about the reaffirm and see if I can get the interest modified. If I can, then I will most likely resign.

[mrslick]

reaffirmation

Reaffirmation is a stupid idea IF you're current on your payment and don't have lots of equity in your home. every rules have exceptions, in my case i did reaffirmed my loan because i was behind on payments. Since i had about $60k in equity and i was doing a loan mod that required me to reaffirm. My lawyer refused to signed the reaffirmation papers, but he did after i told him that the loan mod would save me $750/month and my monthly payments would be under $1300/month. A 3 bedrooms appt rents for more than i would pay after the mod near boston, Mass.

After my load was reaffirmed and my ch7 was discharge, my credit reports were still not showing my monthly payments after 8months. BofA told me that they were reporting it so it was up to the credit bureaus. my loan was tranferred to a new servicer (Seterus) two months ago, i was happy because i thought with a new account # and a new servicer it would be easy to report. Well i was wrong not only Seterus won't report it, it limits my online capabilities. when i called them i was told that my account has a BK code on it, if i want to remove it i would have to send them the reaffirmation paperwork. So if you're only reaffirming to help building your credit, please make sure you wait the plus and minus before you sign the reaffirmation docs. you can build your credit probably quicker without that big mortgage debt on your credit. I'm 9 months out of BK and i have a car loan, two credit cards, my old student loan, and my credit is already above 670. the only thing that can help my credit now is time.