Refi, Reaffirm, no HAMP/HARP

[qlturner]

Hello- I am in the same boat as Sweetjuly - I just found out that my mortgage was not reaffirmed after my BK 2.5 years ago,and now US Bank (original lender) will not refi me without the reaffirmation, nor will anyone else. US Bank says it was my attorney's responsibility to reaffirm, my attorney says it was US Banks responsibility. After reading (and learning so much!) on this forum, I'm not sure I really want to reaffirm now, but I desperately need to refinance in order to free up some much needed cash. I'm not behind on my mortgage payments and have never made a late payment but I don't quality for HAMP/HARP. Do I have any other options? I don't know enough about this process yet and don't feel like I've exhausted all efforts; I just don't know where to go next - any advice?

[Cat Damiano]

Hi qlturner,



Welcome to the forum and thank you for joining..............

If the property is underwater, and not backed by Fannie Mae or Freddie Mac, then the relief that you would be eligible for would be a loan modification if the payment is over 31 percent of your gross income.

[qlturner]

I'm definitely underwater, but my current payment is not 31% of my gross income if I'm figuring correctly - assuming they go by monthly gross. My concern is, if I ever want to sell my home, will the non-affirmation be a problem? While knowing I can walk away with no recourse is somewhat comforting, I have no plans to walk away. Filing bankruptcy was never something I wanted to do, but I didn't have a choice. It's just so frustrating that I could lower my monthly payment by $230 (and that's almost like winning the lottery) but I can't do it. My attorney wants $600 to file the affirmation for me and I obviously don't have $600 laying around or I probably wouldn't be in this position. Can I file the reaffirmation myself? I don't see a choice if I want to refinance. I just can't see paying this payment for 21 more years when I could be paying so much less - and paying more than the minimum every month with the extra cash - something I can't do now.

[despritfreya]

I was not going to join in on the conversations regarding this topic and confess that I have not read very many at loansafe dealing with the same but recently I have been seeing comments such as "its my lawyer's fault that I did not reaffirm my mortgage". I have been a bk practitioner for nearly 25 years and in all that time I have never condoned reaffirming a mortgage.

Ql, you state the lender won't refinance because you did not reaffirm. Garbage. Maybe the lender used that excuse but reaffirming is not necessay when it comes to refinancing (or loan modification for that matter). You state that the property is underwater. The fact that you have no equity is probably the reason you cannot refinance. It is my understanding that typcially you have to have 70 to 80% loan to value. I can't imagine any lender refinancing property that where, the moment the money is loaned, will be underwater.

As it relates to reaffirming and the good job your attny did in not following through I would like to direct you to the following thread. Once you have read through it you will understand why it is my firm belief that reaffirming is a bad idea.

http://www.bkforum.com/showthread.ph...-very-bad-idea

Lastly, please don't even consider paying your attny to file a reaffirmation agreement. The bk Code requires you to enter into the agreement before you obtained your discharge. For any reaffirmation agreement to be effective now you would first have to set aside the entry of your discharge. That, in my not so humble opinion as a bk practitioner, is just foolish.

Des.

[Cat Damiano]

qlturner,


You mentioned in your initial post that you do not qualify for a HARP refinance, as I pointed out, if your loan is not backed by Fannie Mae or Freddie Mac, then HARP would be out of the question anyway. That is the only program available for an underwater borrower to refi. So going through the process to reaffirm the mortgage in that case would be moot point. As Des mentioned why would you want to reaffirm the mortgage when it wouldn't be necessary to do that if you would want to try modification.

[qlturner]

Cat and Des - you've both given me such good information and I really appreciate it. After reading this forum and doing some more research, maybe I am lucky that I didn't reaffirm. I will call US Bank to see if I quality for a modification, and if I don't, then I'll just **** it up, accept what I can't change, and find other expenses to cut back on. There really is a smug gratification knowing that if something bad were to happen - God forbid - that I could walk away........

[Cat Damiano]

Cat and Des - you've both given me such good information and I really appreciate it. After reading this forum and doing some more research, maybe I am lucky that I didn't reaffirm. I will call US Bank to see if I quality for a modification, and if I don't, then I'll just **** it up, accept what I can't change, and find other expenses to cut back on. There really is a smug gratification knowing that if something bad were to happen - God forbid - that I could walk away........

Now you have grasped the importance of NOT reaffirming the mortgage with the BK, and that is the fact that if anything were to change in your circumstances beyond your control, you would not have that looming over you. Especially if you live in a recourse state like me. Good Luck with whatever route you decide to take and please keep us posted on your progress.