Question about how a reaffirmed mortgage looks on credit reports?

[2b2rich]

I have been reading the pinned thread about rebuilding/700 score at 2 years post discharge and the strategy behind rebuilding.

I will be reaffirming my Mortgage and from what I understand, it will be similiar to a refinance in that it is a new loan that reports to the CBAs.

So, will I have the original mortgage showing as IIB, but a new Mortgage showing as a positive tradeline?  If so, won't that also help with the rebuilding?

[FireMedic1]

If you are current on your loan payments and able to meet future payments, reaffirming informs the lender that you intend to pay the mortgage. This allows you to keep your home during bankruptcy as long as you abide by the terms of the reaffirmation agreement and make the payments. Reaffirming your mortgage ensures communication between you, the bank, and the credit reporting agencies, says Jennifer Brown of Fifth Third Bank. “When you reaffirm, it’s going to alert the credit bureaus that you’re going through a bankruptcy so it looks like you’re paying your mortgage and shows that you have a history of making payments,” Brown explains. Some lenders require borrowers to reaffirm their mortgage in order to have future payments recorded on their credit report.

https://blog.equifax.com/credit/should-i-reaffirm-my-mortgage-debt-after-bankruptcy/ 

[2b2rich]

It would seem that nothing will change on the Mortgage tradeline (other than probably IIB until discharge, then the IIB will be removed).  If that is so, then I would be coming out of BK7 with 4 years of positive credit with that tradeline at discharge, unless I have to enter into a new loan agreement but I'm not seeing where that is going to be the case?

I found this at one of the bankruptcy websites:
'What Is Reaffirmation?

When you reaffirm a debt, you agree that you will still owe the debt after your bankruptcy case ends. Both the creditor’s lien on the collateral (which gives the creditor the right to take the property if you fail to pay as agreed) and your liability for the debt under the original contract (called a promissory note) essentially survive bankruptcy intact. In most cases, it will be as if you never filed for bankruptcy for that debt.'

This is from the Experian website, it is using an auto loan for the example but I would think a mortgage would be the same as far as no longer showing IIB:

'If you reaffirmed your car loan, it should no longer show a status of included in bankruptcy.'

(Sorry, I seem to be having connection issues here in the forums)

[FireMedic1]

Mortgage and a car loan are different. No equity in a car really. I reaffirmed my truck. Once paid it was like I never filed BK. Reported as closed with perfect payments. No mention of anything else.

[Anonymous]

I had a mortgage through a chapter 13.  I was 2 months behind when I filed and they got paid what was in arrears.  I reaffirmed the mortgage and paid for the next 4 years until discharge.  On the credit report it showed as closed with no activity during the BK.  1 month after discharge, they started reporting payments on a new loan.  Nothing during BK, just that 1st month & now 2 more payments since.  Last month I went under the 80% Loan to value threshold and they stopped PMI, saving me ~$150/month.  I called and they would talk to me again, as I wanted to know about refinancing to a shorter term and/or lower interest.  They pulled a soft check and said wait a few months since I had 0 credit history reporting.

During the 4 years in BK, they would not talk to me other than taking payments.  All communications went through the lawyers.

[FireMedic1]

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@Anonymous wrote:

I had a mortgage through a chapter 13.  I was 2 months behind when I filed and they got paid what was in arrears.  I reaffirmed the mortgage and paid for the next 4 years until discharge.  On the credit report it showed as closed with no activity during the BK.  1 month after discharge, they started reporting payments on a new loan.  Nothing during BK, just that 1st month & now 2 more payments since.  Last month I went under the 80% Loan to value threshold and they stopped PMI, saving me ~$150/month.  I called and they would talk to me again, as I wanted to know about refinancing to a shorter term and/or lower interest.  They pulled a soft check and said wait a few months since I had 0 credit history reporting.

During the 4 years in BK, they would not talk to me other than taking payments.  All communications went through the lawyers.

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I take it this was a Chap 13?

[MyDataMyChoice]

Did a BK7    did not reaffirm anything...   it shows discharged on credit report.... thats ok...    house is still mine.. and companies will not forclose or repo if you are paying on time... i even still get statements and can pay online.   However I retain my BK protection... at anytime i can stop making payments... or walk away / short sale and not be on the hook for the difference.   However currently there is equity (that was protected by exclusions)

I am up to date on the 1st and 2nd mortgage... and the auto loan.  

I Would recommend anyone going thru BK to not reaffirm anything... don't think well what about my credit... i can tell you your credit is already taking the hit... mine as well show a complete 0.00 balance... and start fresh for a rebuid.

Also google dave ramsey... why do we all even care about credit score... just tells the bank Hey I'm good at borrowing money and paying interest!   lend to me!   

work on saving money.. investing and building wealth..   you need a mortgage... there are companies that go by income and down payment...         and you can rebuild with three lines of credit and an installment loan.  (share secured, etc)

Build a budget...

When you have credit.... make it work for you... 

[2b2rich]

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@MyDataMyChoice wrote:

Did a BK7    did not reaffirm anything...   it shows discharged on credit report.... thats ok...    house is still mine.. and companies will not forclose or repo if you are paying on time... i even still get statements and can pay online.   However I retain my BK protection... at anytime i can stop making payments... or walk away / short sale and not be on the hook for the difference.   However currently there is equity (that was protected by exclusions)

I do have a good bit of equity that is protected, and I want to keep it protected, which is only one of the reasons I am reaffirming.  The 3.5% / 30 year fixed is another.  You don't walk away from that if you're sure you can make the payments, and I am certain that I can. I wouldn't want to walk away from the 4 year, perfect mortgage tradeline with excellent payment history either.  Maybe that's just me, but I don't feel that it's a bad decision for me to reaffirm.

I am up to date on the 1st and 2nd mortgage... and the auto loan.  

That's awesome.

I Would recommend anyone going thru BK to not reaffirm anything... don't think well what about my credit... i can tell you your credit is already taking the hit... mine as well show a complete 0.00 balance... and start fresh for a rebuid.

Well, everyone's pre-BK credit is different, and while the BK7 showing up on my report and about four 30-day lates that popped up around the same day the BK7 showed up, did drop my score by about 100, I know it will recoup.  

Also google dave ramsey... why do we all even care about credit score... just tells the bank Hey I'm good at borrowing money and paying interest!   lend to me!   

Dave Ramsey's guide has flaws.  I have read a lot of his stuff and yes, for the most part it's good advice, but it's not for everyone.

work on saving money.. investing and building wealth..   you need a mortgage... there are companies that go by income and down payment...         and you can rebuild with three lines of credit and an installment loan.  (share secured, etc)

Build a budget...

When you have credit.... make it work for you... 

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Sounds like you have a really good grip on your post BK7, that's great!