Tag Archives: mortgages

Mortgage Balance Not Reaffirmed?

 

Had a different question last week, from someone who did not reaffirm her mortgage in her Chapter 7 case, kept current on the  payments, but wanted to pay off the balance for less than what was owed on the mortgage balance.

REAFFIRMATION

Just to review, reaffirmation is the process for you to obligate yourself once again to pay a debt, after you file bankruptcy.  It is an agreement between you and the creditor, filed with the court, BEFORE you get your Chapter 7 discharge.

So, you cannot force the creditor to sign, and the creditor cannot force you to sign.

Even after you sign, you have 60 days to just change your mind and back out.  This is an absolute right; you do not need a reason.

As I keep saying, reaffirming on a mortgage is a mistake.

The benefit is all to the creditor, who can sue you if it later forecloses on the defaulted loan, and the Michigan foreclosure sale amount is LESS than that balance.

You can keep your Michigan house after Chapter 7 if you just keep making the payments, on the loan and the taxes and insurance.  Of course, if you cannot, and default, the bank can foreclose, whether you reaffirmed or not.

Back to the question:  potential client wants to take retirement funds and get the mortgage cleared for $30,000 less than what she owes.

She stayed current on the payments; of course, the house is underwater, so her thinking is that the mortgage company is better off taking her lump sum and writing off the rest, which has alrady been discharged in her bankruptcy.

True enough, but, this loan is not in default.  It is a performing loan on their books, not one fo the tens of thousands of problem loans it has.

So, she is thinking of walking away from this house, taking out the retirement money and bjust paying cash for a different house.

I counsel against taking out retirement money unless there is a very good reason, which I do not think this is.

What do you think?

 

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Michigan Bankruptcy Mortgage Options

MICHIGAN BANKRUPTCY MORTGAGE OPTIONS Part One You owe more on your mortgage than your house is worth, you want to leave, what are your options? You Cannot Afford The Payments If you cannot afford the payments, you will not be able to keep your house, unless you get a modification from the mortgage company. YouContinue Reading

3 Responses to Michigan Bankruptcy Mortgage Options

  1. This is good information Kurt.Our elected officials really need to open there eyes and look at the housing crisis, especially in Michigan.Thanks again

9 Responses to If I File Bankruptcy In Michigan, What Happens To My House?

  1. I know some people who have gone through bankruptcy and kept their house, car, and very often even came out with a higher credit score. Bottom line is, get a good attorney, do the right thing. There should be nothing to fear about going through the process.

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Michigan Foreclosure: The Big Picture

What do the statistics tell us about the big picture for our economy now? That there will be more bankruptcies in Detroit, and everywhere else in Michigan, and the U.S. The foreclosure crisis continues, if you want chapter and verse, read “Reckless Endangerment.” Foreclosure sales are declining, but in judicial foreclosure states, which Michigan isContinue Reading

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  1. More foreclosure issue, more foreclosure attorneys needed. Thank you for this article.

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The Truth About The Foreclosure Crisis

An essential part of the real estate bubble was mortgage securitization, the process by which mortgage loans were sold into investment trusts from which bonds were sold. It was mortgage fraud from A to Z, from the selling of mortgage backed securities trusts, before the trusts were full of mortgages. From the ratings agencies, assumingContinue Reading

The Truth About Second Mortgages

Second mortgages were marketed as home equity loans, or home equity lines of credit, partly to conceal that they were liens on your house, just like the first mortgage. I can’t tell you how many times I would ask a client, How many mortgages on your home? To be told, just one, and we haveContinue Reading

8 Responses to The Truth About Second Mortgages

  1. Mr. O’KEEFE :
    Very good blog !! I am especially interested in the 2nd mortgage topic. My husband took out a HELOC in 2006 – I did not qualify , so they used all HIS info & it was given to him . But they said I had to
    sign , even though it was HIS loan , because my name IS one the 1st mortgage.

    July 6,2007, my husband died of a self inflicted gun shot wound – suicide .

    GMAC “SOLD” the 2nd mortgage to a company called Specialized Loan Services ,(“SLS”) in 2009, but GMAC service , still, the 1st mortgage. When I tried to speak to “SLS” in 2009 , they said they could not talk to me – I WAS NOT ON THE LOAN !! BUT, they noticed payments were being “voluntarily” made for 4 years . I was doing what mechanically came to me , after witnessing my husband’s death as a result of suicide. They said “I DO NOT OWE THE LOAN , BUT IF I WANTED TO CONTINUE PAYMENTS THAT WOULD BE FINE ” , they even sent me 2 letters stating , “YOU DO NOT OWE THE LOAN , BUT IF YOU DON’T PAY IT – IT COULD OVER TIME AFFECT YOUR HOME” . NOW ~ THEY, “SLS”, is threatening to FORECLOSE on my home !! My 1st mortgage is CURRENT , never late , taxes are
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    I’m in a catch 22 situation !! I don’t owe the loan – but the say they are going to foreclose !! AS a 63 year old widow, under the circumstances , in which he died , and being on a fixed income ( VERY fixed ) , no income , living on his & my S.S. , but managing to “JUST MAKE IT ” !!

    CAN , they do this ?? I STOPPED paying this in May, 2011 – after they said – “it isn’t your loan”. NOW, the threats have started.
    Sincerely ,
    Loretta

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The Real Truth About Mortgages (Part One)

mortgage

This has been the most common question I get for a long time, so I will periodically post on the possible answers. If you are current, and can afford to continue paying, there is really no bankruptcy alternative. You can stop paying, the so-called “strategic default“. Unfortunately, there is no accurate prediction as to whatContinue Reading

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One Response to Rescinding Reaffirmation

  1. Your posts are very informative. I’m in the, I never thought I’d be in this position, position. I’ve found a great attorney but I still have a ton of questions and you’ve helped answer a few.

More Michigan Bankruptcy And Foreclosure News

house

The bailout cost for the “too big to fail” banks and mortgage companies has not even peaked. Taxpayers, like Joe Inhoch, our new fictional blog character, are on the hook hundreds of billions more, counting only the Fannie Mae and Freddie Mac loans that go south. Our politicians already already bailed out those companies, with Joe’sContinue Reading