QUESTION

Can we refinance or sell our home after the bank made an error in reaffirming our loan after bankruptcy?

Asked on Aug 06th, 2014 on Bankruptcy - California
More details to this question:
In 2009 we file for bankruptcy (case number 09-40713) in the district of Ma. Our court documents and statement clearly indicated that we requested to reaffirm our mortgage and home equity line with Wells Fargo Bank. Note that before, during and after our bankruptcy we have not been late with any of our Wells Fargo payments. This has remained our priority even when we could hardly keep up with other bills. We soon noticed that our monthly statements still had us listed under bankruptcy. We contacted Wells Fargo and we were told a few times that all was good. They said it could take 12 or more months for our statements to be adjusted. So we trusted them and waited. When nothing changed we contacted our attorney, she stated that Wells Fargo obviously made a clerical error. She sent them a letter confirming that we requested the loans to be reaffirmed. Wells Fargo then told us that our home equity loan got reaffirmed, but the mortgage never did and it was now too late to fix any mistakes despite my lawyer’s letters and the court paper work. We were told that as long as we kept our payments current nothing would be affected, we were even told that this error would not prevent us from re-financing in the future. Here we are in the future. With the new low mortgage percentage rates we figure why not re-finance. Wells Fargo now told us that due to our mortgage being listed in bankruptcy we couldn’t re-finance. Even after speaking with various departments we were told that there was nothing they could do to help us, but that nothing is preventing us from selling and starting fresh. Note that we have owned our home for 11 years, during this time both loans were paid on time; we have never missed or defaulted on our payments. After taking some time to clear our minds and check the current market, we said fine, we are in need of a bigger home anyway so let’s sell and move on from this madness. Now we are being told by not one, but two mortgage lenders that despite.
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2 ANSWERS

Bankruptcy Attorney serving Las Vegas, NV at A Fresh Start
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Your desire to reaffirm does not commit your lender to offer you a reaffirmation. If you want to apply to refinance your property, you should be checking out your credit score & speaking with local lenders about the qualifications needed to obtain a new loan. If two lenders have turned you down, you should find out why.
Answered on Aug 12th, 2014 at 4:59 PM

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Commercial & Bankruptcy Law Attorney serving Powell, OH at Ronald K. Nims
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It should be no problem to either sell or refinance your home. In either case, the title agent who's handling the transaction will get the pay-off balance from Wells Fargo, and pay off that loan from the proceeds of the sale or refinance. Upon receiving the pay off, Wells Fargo will release their lien - exactly the same as a loan which didn't go through bankruptcy.
Answered on Aug 11th, 2014 at 4:01 AM

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