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Chapter 7 already discharged - mortgage not reaffirmed - foreclosure/credit score question

New Visitor

Re: Chapter 7 already discharged - mortgage not reaffirmed - foreclosure/credit score question

could someone tell me if i can reaffirm my mortgage a while after my bk.....mortgage company says no and i dont feel like paying my attorney unless i have to..i belive it was discharged over 7 years ago...i have never missed a payment and i am probably 5 payments ahead also pay over 3-5hundred more to the principle for over these years

Message 91 of 96
New Visitor

Re: Chapter 7 already discharged - mortgage not reaffirmed - foreclosure/credit score question

i am sorry if this looks like a dup but i didnt check a box to email with reply....short and sweet....can you reaffirm dept over 5 years after a 7 discharge for a mortgage....i have paid alot more toward principle and i am 8 payments ahead

Message 92 of 96
Community Leader
Valued Contributor

Re: Chapter 7 already discharged - mortgage not reaffirmed - foreclosure/credit score question


dgags wrote:

could someone tell me if i can reaffirm my mortgage a while after my bk.....mortgage company says no and i dont feel like paying my attorney unless i have to..i belive it was discharged over 7 years ago...i have never missed a payment and i am probably 5 payments ahead also pay over 3-5hundred more to the principle for over these years


Short answerL No. First of all, it would extremely unlikely a judge would refverse a BK discharged 7 years ago for the sole purpose of allowing a reaffirmation. But more importanly, no one can be forced to reaffirm a debt - if the mortgage co. says no they cannot be forced to accept one. And most importantly: why in the world would you want to do something so foolish? There is rarely any financial reason to reaffirm a mortgage during BK, and absolutely no reason to reaffirm one 7 years later. The much more sensible thing to do is just refinance the mortgage. The current lender will not refiance a non-reaffirmed mortgage as that can be considered and attempt to collect a debt discharged in BK, a huge liability for them. But other lenders should be happy to refi your mortgage since you have such an excellent payment history.

 

And just to be clear, you never get x payments "ahead" of a mortgage. Think of the monthly payment as the minimum payment - if you pay more than the monthly payment that's great, the additional payment reduces the principal balance of the loan, but you still have to pay the monthly payment the next month as the minimum payment.


Fico 08: 720/721/719 TU/EX/EQ
Message 93 of 96
New Visitor

Re: Chapter 7 already discharged - mortgage not reaffirmed - foreclosure/credit score question

We filed a BK in 2012 here in Florida and we thought we had reaffirmed our 1st and 2nd but they both list us as closed discharged.

Our credit reports show that we have made on time payments "Closed - No missed payments"? I have paid off a car that we reaffirmed and our credit scores are now up to 707. The issue we have is that my wife is disabled and I have been unemployed for the last 11 months, I spent 4 days in the hospital and the medical bills are huge. We want to downsize to a condo and we are thinking about selling but when I called the bank and they said that we do not own the house and that there was no reaffirmation. 

If we stop making payments on this house how long will they take to foreclose?

How is the second mortgage handled if we stop paying them for a debt that has been discharged?

How would a forecloser on a discharged debt look on our credit report?

I am a Veteran so I qualify now for VA loan but we would have to sell this place and we are still a little upside down in it due to the market.

We do not have enough money for a downpayment unless I cash in a 401k but a friend said that if we could live here for a year without paying we could save up some real deposit money.

I am getting advice from every direction and I am not sure which way is best or how long we can stay here either way??

It really ticks me off that the banks could foreclose on us at any time after paying on time for 14 years (including the last 3 yrs since BK)

I hope someone could please help us out so we can weigh our options and lessen our financial burden

Thanks

Buck

Message 94 of 96
Community Leader
Valued Contributor

Re: Chapter 7 already discharged - mortgage not reaffirmed - foreclosure/credit score question


Lockhart wrote:

We filed a BK in 2012 here in Florida and we thought we had reaffirmed our 1st and 2nd but they both list us as closed discharged.

Our credit reports show that we have made on time payments "Closed - No missed payments"? I have paid off a car that we reaffirmed and our credit scores are now up to 707. The issue we have is that my wife is disabled and I have been unemployed for the last 11 months, I spent 4 days in the hospital and the medical bills are huge. We want to downsize to a condo and we are thinking about selling but when I called the bank and they said that we do not own the house and that there was no reaffirmation. 

 

- I'll take a short at your questions as best I can. To reaffirm the mortgage you would have had to sign a reaffirmation agreement, and it also had to be signed by your attorney, the lender, and approved by the BK court - do you remember doing any of that? But if it's listed on your credit reports as 'closed, discharged in BK, and $0 balance, then you didn't reaffirm, and since that's what the bank say that is most likely the case. But the bank is very wrong about yoiu not owning the house - even if the debt was discharged the lien on the property from the 1st & 2nd mortgage remain, and you own your home subject to those liens

 

If we stop making payments on this house how long will they take to foreclose?

- Hard to say, some banks are faster and more aggressive than others. FL is a judicial foreclosure state, meaning to foreclose they have to file a case in state court, which slows down the process. .The lender initiates the foreclosure by filing a complaint with the court and having it served to the borrower, along with a summons to a hearing.

 

How is the second mortgage handled if we stop paying them for a debt that has been discharged?

- Are the 1st & 2nd mortgages with the same lender? If so, then they would probably foreclose. If different lenders then the 2nd mortgage holder would likely NOT foreclose.  Because a 2nd mortgage is junior/subordinate to the 1st mortgage, if the 2nd mortgage lender foreclosed they would have to pay the first mortgage in full, losing them a bunch of money if your house is underwater. The would likely wait & take their chances the home value increases..

 

How would a forecloser on a discharged debt look on our credit report?

- A foreclosure would not appear on your credit report, once a debt is discharged that is end of story, they can't report anything else on it. But it would affect your chances of getting a new mortgage in the future, because as future mortgage lender will see the mortgage discharge and want details of payment history.

 

I am a Veteran so I qualify now for VA loan but we would have to sell this place and we are still a little upside down in it due to the market.

We do not have enough money for a downpayment unless I cash in a 401k but a friend said that if we could live here for a year without paying we could save up some real deposit money.

I am getting advice from every direction and I am not sure which way is best or how long we can stay here either way??

It really ticks me off that the banks could foreclose on us at any time after paying on time for 14 years (including the last 3 yrs since BK)

I hope someone could please help us out so we can weigh our options and lessen our financial burden

Thanks

Buck

 

- Well, a mortgage has a payment fue every month and if you are 30+ days late they have the right to foreclose, even if you're in the 29th year of a 30 year mortgage, that's just how it works. Are you sure your house is underwater? To sell the house and just break even ore even to have to pay a little to payoff the mortgages in a sale would be the best solution. Good luck, and thanks for your service to our country as a vet.


Fico 08: 720/721/719 TU/EX/EQ
Message 95 of 96
Moderator

Re: Chapter 7 already discharged - mortgage not reaffirmed - foreclosure/credit score question


Lockhart wrote:

We filed a BK in 2012 here in Florida and we thought we had reaffirmed our 1st and 2nd but they both list us as closed discharged.

Our credit reports show that we have made on time payments "Closed - No missed payments"? I have paid off a car that we reaffirmed and our credit scores are now up to 707. The issue we have is that my wife is disabled and I have been unemployed for the last 11 months, I spent 4 days in the hospital and the medical bills are huge. We want to downsize to a condo and we are thinking about selling but when I called the bank and they said that we do not own the house and that there was no reaffirmation. 

If we stop making payments on this house how long will they take to foreclose?

How is the second mortgage handled if we stop paying them for a debt that has been discharged?

How would a forecloser on a discharged debt look on our credit report?

I am a Veteran so I qualify now for VA loan but we would have to sell this place and we are still a little upside down in it due to the market.

We do not have enough money for a downpayment unless I cash in a 401k but a friend said that if we could live here for a year without paying we could save up some real deposit money.

I am getting advice from every direction and I am not sure which way is best or how long we can stay here either way??

It really ticks me off that the banks could foreclose on us at any time after paying on time for 14 years (including the last 3 yrs since BK)

I hope someone could please help us out so we can weigh our options and lessen our financial burden

Thanks

Buck


I believe the information in red is incorrect. Of course, I don't know for sure but I can tell you that your best bet is to contact your Bk attorney.

 

Filing Bk and getting a discharge does NOT mean you don't own the house if you have been making payments ontime. The lender would have had to foreclose against the mortgage lien to get the property from you.  You would know it if you had been through a foreclosure.

 

Do not stop making your payments. Contact your Bk attorney or better yet a very good real estate attorney. There is no reason why you could sell your home and keep the proceeds fom the sale. I have done it with clients of mine (I'm a Realtor here in Fl). I think either the CSR didn't know and gave you bad info or something else is going on. Don't rely on the discharged lender to give you proper info.

Message 96 of 96