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Non-Reaffirmed Second Mortgage Showing on Credit Report

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Anonymous
Not applicable

Non-Reaffirmed Second Mortgage Showing on Credit Report

In 2009 my Chapter 7 bankruptcy was discharged. I did not reaffirm my mortgages, but have been making my payments and have kept my home. My first mortgage appears on my CR as IIB with a zero balance. My second mortgage, however, is still showing as it always did prior to BK. This would be good, if I hadn't had some late payments post-BK. I've been current over a year, but I'm afraid these past lates will cause a problem with underwriting when we apply to buy a new home. From everything I've read, this mortgage should report the same as the first - IIB, zero balance with no history reported post bankruptcy. I've written to the mortgage company asking them to report this way and am awaiting an answer.

 

My questions are, can they legally report this debt on my credit report when I am not legally, personally, responsible for it any longer? And, can anyone direct me to the actual law?

 

Thanks so much for your help. I have learned so much from this board. I'm hoping someone can help me with this.

Message 1 of 7
6 REPLIES 6
krielly
Established Contributor

Re: Non-Reaffirmed Second Mortgage Showing on Credit Report

You may want to do a bit more research before requesting the second mortgage company stop reporting your payments. While a recent late payment is hurting your score now, as time goes on the benefit of having a mortgage account reporting your payments may outweigh the negativity of the late payment once it gets further behind you.

 

Many people would LOVE to have their mortage companies report on time payments after the BK, but they are not required to unless you re-affirm, and many refuse to do so.

 

K


You can't have your cake and eat it too. But you can dip your finger in the bowl and lick the icing!
Message 2 of 7
SoulMaster
Established Contributor

Re: Non-Reaffirmed Second Mortgage Showing on Credit Report

Pull copies of your approved BK schedules + discharge from PACER or your attorney.  Send them CMRRR to your 2nd morgage holder with a letter from your attorney (on law firm letterhead) explaining that they are in direct violation of the bankruptcy code by reporting the tradeline as anything other than IIB/0 balance (it's considered a collection effort).

 

In that letter, tell them that if they don't correct the problem, you'll turn the matter over to your trustee.

 

Send the same letter to all three CRAs.

 

You'd be suprised how quickly things move when the threat comes from a real attorney (as a debtor, you have zero gravitas when you deal with creditors yourself).

 

-Cheers

 

-SM

 

P.S.  If the 2nd wasn't on your approved schedules, you're SOL unless you re-open the BK and have it ammended, which is a PITA.

 

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 Late January 2016 All 700+. Last CR pull from a lender(housing) was mid-score 749.
Goal Score: 700+ - reached.
Message 3 of 7
Anonymous
Not applicable

Re: Non-Reaffirmed Second Mortgage Showing on Credit Report

Thanks, SM. I already have the discharge and schedules and it was included in the BK which was originally a 13 that we converted to a 7. It's been two weeks since I sent the letter. I know they have 30 days. This isn't a large servicer. I'm pretty sure they're not even aware of the laws. I'm going to call the owner of the company on Monday. I actually used to work for the company back in the day. I hate to call because the whole situation is embarrassing, but I'm going to do it. It means a brand new house to me. Must swallow my pride. If the call to him doesn't work, then I'll call my attorney. 

Message 4 of 7
SoulMaster
Established Contributor

Re: Non-Reaffirmed Second Mortgage Showing on Credit Report

Did you send the letter or did you have an attorney send it for you?  Seriously, creditors laugh at debtors when they call and quote "the law".  Their theory is: "Until creditor X has an attorney, they aren't really serious".  Sucks, but true.

 

You may have a shot if you call the owner of the company, though... if you know him!  Boy, I wish I knew the owner of a bank, that would make my life a million times easier!

 

Also, pride is on the list of 7DS for a reason, but I think you've got this one backward.  The bank is the one acting with no honor... you sought your remedy under the law rather than running away like a coward, and they are not following through on their obligation as a creditor.  I think your argument is just, correct, and fair.  It's not about you having to swallow your pride, it's about the bank swallowing theirs and admitting that they are in the wrong.

 

That last bit was my 2¢, as opposed to the facts I normally lay out on the BK board.  But then, I see the world much differently than most and sometimes like to share an opinion, too. :-)

 

Cheers,

 

-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 Late January 2016 All 700+. Last CR pull from a lender(housing) was mid-score 749.
Goal Score: 700+ - reached.
Message 5 of 7
Anonymous
Not applicable

Re: Non-Reaffirmed Second Mortgage Showing on Credit Report

I sent the letter.

 

I get embarrassed easily about money issues. Growing up, we were taught, "You don't talk about money." And, being in the mortgage business as long as I was, I know what people say about other people and their credit issues behind their back. Although, I was on the originating side and originators are always trying to figure out how to make loans work. It's the underwriters who act like they're holier-than-thou and never missed a payment in their lives, no matter if the sky was falling and all the birds had croaked. (Not true, but that's how they act.) So, the whole thing is doubly embarrassing for me, because I "should have known better."

 

Anyway, I know what you mean about the attorney thing. I was just hoping not to have to go that route. We'll see what happens on Monday. I asked this question on this board and I asked the same question on an attorney's blog, just to make sure I was in the right. The attorney said just what you said, it has to be IIB/0. I just wanted to make sure, before using my "ace in the hole" by calling the owner. If that doesn't work, I know I have another ace up my sleeve with the attorney. Of course, it would be nice if the CBs would just fix it and I wouldn't have to get personal, or legal, about the whole thing. 

 

BTW, what are the 7Ds?

Message 6 of 7
SoulMaster
Established Contributor

Re: Non-Reaffirmed Second Mortgage Showing on Credit Report

Sorry for the delayed response:

The 7DS are The Seven Deadly Sins:
Gluttony
Greed
Envy
Sloth
Pride
Lust
Wrath (or Anger/Avarice depending on the version)

Removing those 7 things from your life always yields positive outcomes.

-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 Late January 2016 All 700+. Last CR pull from a lender(housing) was mid-score 749.
Goal Score: 700+ - reached.
Message 7 of 7
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