QUESTION
Is it possible to reaffirm mortgage and is it productive?
Asked on Jan 06th, 2013 on Bankruptcy - Michigan
More details to this question:
Bankruptcy was discharged in 2010. My intentions were to reaffirm mortgage(s), which I thought was done. Recently discovered not done, I can't re-finance for lower rate and my bank tells me that if I were to die they get the house and all the equity. I am receiving monthly statements and tax papers. I want to reaffirm to clear this up. Is the bank right about equity? Mortgage is only in my name.
12 ANSWERS
Bankruptcy Attorney serving Plantation, FL
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Moffa & Breuer, PLLC
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Nothing you've said makes any sense. I'd talk to another bank or a mortgage broker.
Answered on Jan 11th, 2013 at 12:24 AM
Daniel James Wilson
If you die your estate passes to whoever you designate in your will, or if you die without a will (intestate) your estate will be distributed according to the rules of intestacy. Of course, whoever receives your house takes it encumbered by the existing mortgage. It is too late to reaffirm your mortgage. It must be done before BK case closes. In addition, there is no good reason to reaffirm mortgage. If you have equity in the house you may be able to refinance, but go to another bank or mortgage broker. There is no debt to refinance with your current mortgage holder. It was discharged by your Ch 7. Of course the lender retained a mortgage to secure the discharged debt.
Answered on Jan 10th, 2013 at 12:27 PM
Bankruptcy Law Attorney serving Austin, TX
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Law Office of Susan G. Taylor
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If you did not reaffirm (and many lawyers advise against it) your mortgage they can use it as an excuse to deny further negotiations, but they cannot take it in the event of your death, to seize an equity interest. You maintain all rights of ownership in your home. Perhaps you can re-finance the mortgage through another lender.
Answered on Jan 10th, 2013 at 11:08 AM
Chapter 13 Bankruptcy Attorney serving Winston-Salem, NC
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Love and Dillenbeck Law
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You can't reaffirm after your case is closed and in fact no Judge in NC will approve a reaffiration unless they give you something in return such as a modificaiton. It is common for a mortgage company to make these statements which are false. Reaffirmation does not affect your ability to keep the home...paying the mortgage does...All reaffirmation does is give the Bank the right to sue you if they foreclose and there is a deficiency. If you die...with or without a reaffirmation, your heirs would need to keep paying the mortgage or sell the home.
Answered on Jan 10th, 2013 at 11:07 AM
It is so not a good idea to reaffirm a mortgage in bankruptcy. The bank staff who is telling you that you don't qualify to refinance or apply for a loan modification because you didn't reaffirm are lying liars.
Answered on Jan 10th, 2013 at 11:06 AM
Business Bankruptcy Attorney serving Raleigh, NC
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J.M. Cook, P.A.
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The bank has a lien on the house. If you satisfy the lien either by sale or refinance, then the lien is removed.
Answered on Jan 10th, 2013 at 11:05 AM
Bankruptcy Attorney serving Hampton, VA
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Haven Law Group, P.C.
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No, you can not reaffirm once your discharge goes through. You could ask the Court to reopen the case, revoke the discharge so that the reaffirmation could be put in place. Then the discharge could be granted again. This would be costly and I am not sure that it would be worth it. You probably will be able to refinance in a few years after your credit score improves.
Answered on Jan 10th, 2013 at 11:05 AM
Chapter 13 Bankruptcy Attorney serving Bloomington, MN
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Gregory J. Wald
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It is generally not a good idea to reaffirm a mortgage because it gives the lender the right to sue you if you default in payments later on. As long as you continue the payments, you can keep the property. The mortgage company does not get the house and all the equity when you die, unless they don't receive payments due and they foreclose as a result. You can't refinance with this company, but you may be able to refinance the propety with a different company.
Answered on Jan 09th, 2013 at 12:12 PM
Chapter 7 and Chapter 13 Bankruptcies Attorney serving Dublin, OH
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Granger Law Firm LLC
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By not reaffirming the mortgage, you are no longer entitled to positive treatment on your credit report for the payments you are making. However, you are also not liable on the debt so you could walk away from the home anytime and not owe a dime. That being said, the mortgage company cannot foreclose on the property as long as you remain current on the payments. Even if you were to pass away, the house could not be foreclosed upon as long as your relatives remain current on the payments. They would need to work on getting the deed in their name, but the house would be safe as long as they were paying every month. You may have difficulty refinancing the mortgage by not signing the reaffirmation agreement, but you can sell the house at any time and keep the equity.
Answered on Jan 09th, 2013 at 12:10 PM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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Why would you rely on legal advice from your lender? Assuming this is a traditional deed of trust or mortgage, if you die your heirs will continue to pay the mortgage, unless you have insurance or an estate that pays it. Normally, the lender can only take your home if the payments are not made. This is very generic advice so it is important for you to meet with an estate planning attorney in the state where you live.
Answered on Jan 09th, 2013 at 12:10 PM
Tax Problem Resolution Attorney serving Lake Oswego, OR
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THE WUHRMAN LAW FIRM
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A debt may not be reaffirmed after the discharge is entered, so it's too late to do that. Frankly, though, it would never have been a good idea because, if you ended not being able to pay the mortgage post-bankruptcy and wanted to walk away, the bank could sue you post-foreclosure if the foreclosure did not yield a high-enough price, and your state allows post-foreclosure deficiency collection. It is not necessarily true at all that, if you die, the bank gets all of your equity. The bank is allowed to demand payment of the amount due on your loan. If the house sells for more than that after you die, the rest goes to your heirs.
Answered on Jan 09th, 2013 at 12:10 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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If the bank has foreclosed and now owns the title, it is not your property unless you correct that.
Answered on Jan 09th, 2013 at 12:07 PM