Posted on: 13th Dec, 2009 09:21 pm
I am in Ch 7 bankruptcy. The lender required me to file a reaffirmationa agreement on my mortgage. The court denied it once. I have a requested hearing to request approval. If the court denies my reaffirmation again, does that mean I will have to lose my home? I entered a loan modification with the bank and have been making payments. But if the reaffirm is denied, does that mean the bank will nullify the loan mod and make me give up my house even after the discharge? Desperately seeking an answer.
Hi ngc,
The bankruptcy court can deny the approval for a reaffirmation agreement if it thinks the agreement is not in your best interests. But this does not imply you will have to give up your house. The loan modification agreement you entered into will still be considered valid. So long as you keep making payments towards the mortgage, you have no fear of losing the house. No lender would want to foreclose on the property as long as you are current on the mortgage.
The bankruptcy court can deny the approval for a reaffirmation agreement if it thinks the agreement is not in your best interests. But this does not imply you will have to give up your house. The loan modification agreement you entered into will still be considered valid. So long as you keep making payments towards the mortgage, you have no fear of losing the house. No lender would want to foreclose on the property as long as you are current on the mortgage.
If the court denies and you do not sign the debt reaffirmation agreement, then you would not remain liable for the mortgage payments personally. As a result, the lender may cancel the loan modification and foreclose the property. It is true that you'll lose the property but you would not be liable for paying the deficient balance.
I was approved for a loan modification with terms of 2% for years 1-5, 3% for year 6, 4% for year 7 and 4.5% for years 8-26. I later was given a reaffirmation agreement by the same lender with terms of 2% fixed rate for 263 months. Does the terms given in the reaffirmation agreement supercede the terms of the loan modification?
Welcome gzusprint,
If the reaffirmation agreement has been signed after the loan modification, then that agreement will supersede the terms of the loan modification.
If the reaffirmation agreement has been signed after the loan modification, then that agreement will supersede the terms of the loan modification.