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Member
karz65
Posts: 8
Registered: ‎04-26-2012
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Trying to refi

In August of 2011 I filed Chapter 7 but asked not to include my mortgage and Heloc.  I was told that a reaffirmation was not necessary as long as I keep making
payments on time.  I have not missed a payment yet.  My Heloc shows up in my credit report but the 1st (BoA) does not.  The dilema I have is that I tried to refinance the
1st mortgage to lower my payments and was told that I could not because the loan was not reaffirmed.  I tried to go through HMA but my mrtg is not under water, I have plenty of equity, and I have been on-time with my payments.  My questions:  Why do I need to reaffirm the mortgage if the refi is going to create a new loan?  In essence wiping out the old loan and creating a new loan which this loan will not be part of the chapter 7.  Or can I just sell the house to myself?
Seeing that it does not show up in any credit report that I have a mortgage, then could I apply for a new one for that same address?
I am trying to just lower my payments to make it easier on myself to be able to keep the house.
I have been told my many that I would have to reopen the bankruptcy case (cost money) and bankruptcy judges are not keen on reaffirmations.
Thank you for any answers you could offer.

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chasmith
Posts: 1,062
Registered: ‎05-26-2010
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Re: Trying to refi

I don't buy the "because you didn't reaffirm you can't refi" excuse.  Is that with your current lender?  Right now with rates possibly heading higher I've heard some big lender/servicers are just dragging their feet.

 

You will have a problem refinancing your first mortgage because of the HELOC.  You won't be able to get a new first mortgage without paying off the HELOC, because when you pay your current mortgage the HELOC drops into "first position", and while your debt to that lender is discharged, their lien remains for the debt.

 

To refi you probably have to pay off both the mortgage and the HELOC.

BK7 Filed 8/11/2009 Discharged 11/23/2009. Purchased new home 4/11/2012
Starting Score:11/16/2009 EQ 566 11/16/2009 TU 538
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Member
karz65
Posts: 8
Registered: ‎04-26-2012
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Re: Trying to refi

Yes, that was the answer I got from my current mrtg holder (BoA).  They will not do any thing until I reaffirm.  And of course you are correct about the HELOC going into 1st.  I'd have to refi all of it.  Which I'd have no problem doing.  Much better to make one pmt than 2.  I just have no idea where to turn now.

 


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karz65
Posts: 8
Registered: ‎04-26-2012
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Re: Trying to refi

This is what was quoted to me:

"I have received notification that the loan for this application , was not reaffirmed from bankruptcy, therefore I am unable to move forward with the processing on this loan."


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chasmith
Posts: 1,062
Registered: ‎05-26-2010
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Re: Trying to refi

IMHO, BOA is one of the all-time worst banks.  The fact that they won't refi you may be a blessing as you can do better.  But reading your post again, what may be happening is that since you didn't reaffirm, the "x years from BK discharge" rules come in to play.  Two years for FHA, three, four or more for conventional.

 

I would talk to one or two local mortgage brokers.  Ask realtors who are good.  Don't apply yet, interview them.  Show them your FICO score and credit report but don't take inquiries until you're sure you know what you want to do.

 

 

BK7 Filed 8/11/2009 Discharged 11/23/2009. Purchased new home 4/11/2012
Starting Score:11/16/2009 EQ 566 11/16/2009 TU 538
Interim Score: 12/27/2012 EQ 683 09/17/2012 EX (lender) 670 1/01/2013 TU 701
Current Score: 11/06/2013 EQ 708 11/06/2013 EX 702 11/16/2013 702 11/06/2013 TU 729
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Member
karz65
Posts: 8
Registered: ‎04-26-2012
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Re: Trying to refi

Thank you!  I will keep my eyes and ears open to any more advice and information.  You have been helpful.


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SoulMaster
Posts: 993
Registered: ‎11-08-2011
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Re: Trying to refi

You need to send it through their loan modification department, not their refinance department.  Because you're discharged in the BK, it's likely you will not only get good terms on the mod, they'll be better than anything you would have gotten via refinance, and (if you hire someone good to do the modificaiton) you've got a great shot at a principal reduction.

 

Here's the rub:  You can't be current and get a mod. (Gov't's rules, not the banks)  This won't effect you, though, as your mortage should be reporting as IIB/$0 balance.

 

PLEASE hire a good law firm to handle this for you.  The numbers don't lie... only 4% of people who try to get a mod on their own are successful.  Any good lawyer will be able to tell you whether or not you'll Q for a modification during a free consultation... if you do qualfiy, they should back it with a 100% money-back guarantee.  Think of the attorney's fee (around $4K) as the points/closing costs you'd pay in a refi anyway and let them do all the hard work.

 

B of A is literally one of the best banks to work with for a principal reduction modification, especially after a BK.  They're right behind Ocwen and Chase... but you HAVE to know what you're doing, and you CAN'T call the main phone numbers (your attorney should be calling the bank's attorney directly).  The main phone # people are paid to deny you... that's why I say that, not to be shady.  (http://www.cnbc.com/id/100818866) It still goes on, and it's still not really news for those of us in the industry.

 

Anyhow, good luck,

 

-SM

 

 

I am not an attorney and none of what I write should be construed as legal advice. For legal advice please consult an attorney.

Starting Score: ~470 preBK(8/2010)
Current Scores as of 3/15/14 All 700+. Last CR pull from a lender(housing) was mid-score 729.
Goal Score: 700+ - reached.
Member
karz65
Posts: 8
Registered: ‎04-26-2012
0

Re: Trying to refi

Thank you so much for the advice.  The only issue I'd have will be with the Atty fees,  points and closing costs can be added into the refi.  I don't think the atty would  approve of that. (jk)  I don't think I like the fact that I'd have to go delinquent just to get this refi'd.  Puts an uneasy feeling in my belly.  Couldn't the bank just start foreclosure for non payment?


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SoulMaster
Posts: 993
Registered: ‎11-08-2011
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Re: Trying to refi

According to the terms of the National Mortgage Settlement, Bank of America cannot foreclose (or even track the time to foreclosure) while you're in "active negotiations for a foreclosure alternative" (=loan modification/short sale negotiation).  Enforcing this rule is why people should hire attorneys to do loan modifications.

 

If you're in CA or NV, the Homeowners' Bills of Rights protect you even further against dual-tracking, and outline the remedies should the bank not play by the rules.  Again, attorney needed to enforce (it even says that in the law).

 

A good attorney would let you make payments on the retainer, which is really easy to handle if you're not making a mortgage payment.  If it were me, I'd talk to an experienced attorney (or two) to make sure I meet the qualifications before I missed a payment, though.

 

-SM

 

 

I am not an attorney and none of what I write should be construed as legal advice. For legal advice please consult an attorney.

Starting Score: ~470 preBK(8/2010)
Current Scores as of 3/15/14 All 700+. Last CR pull from a lender(housing) was mid-score 729.
Goal Score: 700+ - reached.
Member
karz65
Posts: 8
Registered: ‎04-26-2012
0

Re: Trying to refi

You have been a wealth of information SoulMaster.  I will definitely look into a good bk lawyer.  The one I had to help me file the bk7 wasn't really informative.  I suppose I could have asked more questions but i needed to know what to ask first.  And now that I am 2 years into this, I now know what I need to ask.

thank you for all of your help.


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