What happens now that our mortgage wasnt reafirrmed?

[Anonymous]

We filed chapter 7 bankruptcy and no one told us how to reafirrm our mortgage so now we have a loan modification from Wells Fargo and our payments are not being reported to the credit bureaus. I am so confused here what happens now, I was told its too late to reafirmm the mortgage we are continuing to make our monthly mortgage payments. Please can someone help here?

[DaveInAZ]

Did you file BK without an attorney? If you had an attorney they should had explained to you that to reaffirm your mortgage the lender had to provide you with a reaffirmation agreement and that agreement had to be signed by you, your attorney (if you had one), the lender, and approved by the court, and that all had to be done within 60 days of your 341 creditors meeting and prior to discharge.

If your BK has been discharged it is indeed too late to reaffirm. If your BK has been discharged then the mortgage debt was discharged and should show on your CR as a $0 balance, IIB (included in BK).. Your payments will not be reported to the credit bureaus because you can't report payments on a debt that doessn't exist, all your continued payments do is keep the lien/deed of trust current and prevent the lender from foreclosing. If you ever sell or refi your continued payments will reduce the payoff balance on the banks internal books. I didn't reaffirm my mortgage in my CH7 discharged in Jan 2011, I kept the payments current during BK and since discharge, 4 1/2 years later all is well, but anyone looking at my credit report would assume that I just walked away as my mortgage reports on my CR as $0 balance, IIB, with no payments reported since I filed.   

[Anonymous]

Yes we had an attorney Richard A Check and I dont remember him mentioning reafirrming our mortgage on our credit report it does show a 0 balance so as long as we make our payments on time we are okay?  What if we want to selll this house how would we go about doing that?  Since on our credit report it shows we dont have a mortgage or rent payment?

[0REDSOX7]

there are some regions of the country where the courts do not allow reaffirmation of debt, unless under certain circumstances.

With that said - my attorney had a ZERO RE-AFFIRMATION policy.  We did not reaffirm our mortgage.  We get an "Informational Statement" from the lender and pay each month.

[Anonymous]

We live in wisconsin and are able to reafirmm but what I would like to know if we want to sell our home do we just go ahead and do it the normal way since when they run a credit report on us, we show as having not rent or mortgage payment history.

[DaveInAZ]

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@Anonymous wrote:

We live in wisconsin and are able to reafirmm but what I would like to know if we want to sell our home do we just go ahead and do it the normal way since when they run a credit report on us, we show as having not rent or mortgage payment history.

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Yes, if you sell your home it will happen the 'normal way' - when in escrow the escrow officer will contact the lender to get the payoff balance, and when they pay it the bank will release the lien and your buyer gets a clear title. Well, they don't run a credit report when you sell your home. If you're talking about applying for a new mortage to buy a new home when you sell, do you get monthly billing statements showing the current balance on you not reaffirmed mortgage? A new lender will ask for that. Also you should have been receiving a 1098 form every year from the lender showing the amount of interest paid for you to deduct if you itemize expenses on your federal tax return. The 1098 form also lists the payments made during the year, that is all a new lender needs to see that you were not renting but instead remaining your current on your mortgage payments. .

[Anonymous]

I was getting monthly statements not sure if i am now i make my payments online.  Thanks for all your help I appreciate it.

[StartingOver10]

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@Anonymous wrote:

I was getting monthly statements not sure if i am now i make my payments online.  Thanks for all your help I appreciate it.

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I have a suggestion:  Go back as far as you can on your mortgage payment record and download all the payments so you can show that they have been made on time. This will be helpful if you decide to get a new home after you sell your current home.

Yes, it is a completely normal transaction when you sell - as long as the balance owed is less than the market value. It would be a regular short sale if the mortgage balance is larger than market value.

[Anonymous]

We are getting monthly statements but our payments are not being reported on our credit report.  We do get a form from them with the interest we have paid on the house so should I just make a copy of that and keep it if and when we sell this house?

[StartingOver10]

Keep a copy of both the monthly statements and the interest paid form.

When you sell the property, the title co or closing attorney will be able to get a payoff from the lender and that will be on your closing statement for your current home.

The reason to keep your documentation is because when you go to buy another property, the u/w for the new loan will want to see that the payments have been made on time and usually they can see how your payments are made on your CR, unless you have a bankruptcy. This will solve that issue.  Also, it is helpful if the current lender makes an error in processing your payments.