I recently received an email from a blog reader asking about his obligations to his mortgage company when he does not reaffirm:
I have read your blog and you are very through so I write you with hopes that you might answer this question for me. I file Chapter 7 in 08, and did not reaffirm my loan. I am still living in the house and did make some payments. However, i have not for the last 8 months. It is my understanding that I must sign a document to reaffirm and that continuing payment in itself is not a reaffirmation…or? Well it gets a little more complicated. My house is valued at $410,000 and the bank has offered me a deal that is going to be hard to refuse. They have agreed to let me do a short re-fi in the amount of 180k. If I agree to that is that in itself a reaffirmation?
Here is my response: in most cases, when you take out a mortgage loan, you are signing two different types of agreements. The first type is a promissory note whereby you personally agree to make the payments. The second type of obligation creates a property lien, meaning that you, as the owner of the property, pledges that property as collateral for the loan.
More on Can You be Sued for Non-payment of your Mortgage if You Do Not Reaffirm?
Every week I receive several phone calls from homeowners who want to take advantage of the federal HAMP (Home Affordable Mortgage Program) but do not know where to start. Often these callers are behind two or three months and are receiving foreclosure notices, but they really do not want to file Chapter 13 before exhausting all non-bankruptcy alternatives.
More on Federal Mortgage Assistance Programs Modified to Include Bankruptcy Debtors
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This afternoon (September 9), I had a chance to observe a very interesting case heard by one of the judges in the Northern District of Georgia. The issue at hand was a motion filed by a mortgage creditor to "validate" a foreclosure that had been cried out on the courthouse steps back in July.
More on Another Debtor Ripped Off by a Foreclosure Relief Scam (Part One)
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Can you modify your mortgage loan to reduce your principal balance? your interest rate? other terms of your mortgage? Over the past few months, I have heard a lot about mortgage modifications but very few details have emerged and I know of no one who has actually and successfully modified his mortgage.
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In my last post, I attempted to offer a simple explanation about how the housing market in the United States got into trouble. In this post I want to discuss some of the highlights (or lowlights) of what this crash means to you.
More on Why Has the Sub-Prime Mortgage Crisis Been so Toxic to the United States Economy
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The U.S Federal Reserve anticipates that in fiscal year 2009, the Unites States’ economy may shrink between 0.5% and 1.3%. By historical standards, this means that we are in a serious recession. This slowdown may be attributed to many factors – an increase in unemployment, a lack of consumer confidence, a lack of confidence in the investment community and an overall reduction of the amount of liquid assets in our banking system. Perhaps the biggest factor that has hurt the American economy (and the world economy as well) is what can only be called a collapse of the housing market in the United States. Many lenders have gone bankrupt, housing values have diminished and many homeowners are in trouble. Because the housing market is so big it affects every facet of the American economy and when the housing market is in trouble the entire financial foundation of the United States will be in trouble as well. How did we get here and what are the solutions?
More on A Simple Explanation of the Sub-Prime Mortgage Meltdown
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Earlier this month, I wrote a post on this blog setting out the question of whether Congress should enact legislation empowering bankruptcy judges to modify the terms of mortgages within a Chapter 13 bankruptcy.
More on Are Mortgage Modifications in Bankruptcy a Good Idea – Part Two
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There has been a lot of chatter on bankruptcy blogs and bankruptcy lawyer forums about the possibility that Congress will amend the bankruptcy laws to give judges the power to modify mortgages. To offer some perspective, bankruptcy judges have long had the power to modify vehicle loan contracts and other secured debt claims but never mortgage debt.
More on Are Mortgage Modifications in Bankruptcy a Good Idea – Part One
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