What can we do on a reaffirmation of mortgage? 16 Answers as of January 23, 2014

My husband I declared bankruptcy on our business in February, 2011. Our home was part of the bankruptcy on paper even though we knew we wanted to continue making payments, as we did, to keep the home. The lender is not reporting to the credit bureaus that we have never been late and continue to pay without being late. I was just told last week by the lender that I need to reaffirm before they will report our excellent pay history. Our credit score pre-bankruptcy was in the 800 range. It is now 540 three years later because it shows no payment history. We do not have credit cards or a car loan. Can the lender hold us hostage like this regarding our payment history?

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Law Office of Susan G. Taylor
Law Office of Susan G. Taylor | Susan G. Taylor
Yes. And you no longer have the opportunity to reaffirm. However, if you wish to refinance with another lender, you have a right to obtain your payment history from your mortgagee.
Answer Applies to: Texas
Replied: 1/23/2014
J. Baron Groshon, P.A. | J. Baron Groshon
Once your Discharge Order is entered and your case is closed by the Court, then it may be too late to sign a reaffirmation agreement. Many bankruptcy attorneys believe that it may be legal malpractice to ALLOW their clients to sign a reaffirmation agreement on a mortgage, as this is not required by the bankruptcy laws, and it may be a very, very unwise thing for a bankruptcy debtor to sign a reaffirmation agreement on their mortgage because it maintains the debtor's legal liability on the underlying mortgage debt. If you don't sign the reaffirmation agreement, and if you subsequently default in making your mortgage payments, then the mortgage company can foreclose on your real estate, but they cannot sue you for any deficiency due after the foreclosure sale is complete. I strongly discourage any of my clients from signing a reaffirmation agreement with their mortgage company, as doing is likely to hurt the client in far more cases than it will help the client.
Answer Applies to: North Carolina
Replied: 1/22/2014
Stuart P Gelberg
Stuart P Gelberg | Stuart P Gelberg
It is too late to reaffirm, you were right not to reaffirm and you couldn't have reaffirmed even if you wanted to. Get a copy of your pay history from the mtge co and you can have it added to your credit report.
Answer Applies to: New York
Replied: 1/17/2014
Meister & McCracken Law Firm, PLLC | Joanne M. McCracken
You need to speak with your bankruptcy attorney and ask what needs to be done to resolve the situation.
Answer Applies to: Arkansas
Replied: 1/20/2014
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
The actions of the lender are suspect. You can report your own payments. See the attachment. There is no requirement under the bankruptcy code to reaffirm mortgage debt.
Answer Applies to: California
Replied: 1/17/2014
    Patrick W. Currin, Attorney at Law | Patrick Currin
    Why don't you want to reaffirm the debt? I don't see the downside.
    Answer Applies to: California
    Replied: 1/20/2014
    Idaho Bankruptcy Law | Paul Ross
    Once a debt is discharged, they cannot report on your credit anymore. It is an attempt to collect a debt. Without a reaffirmation, the debt is gone. Reaffirmation agreements cannot be filed after discharge, so you cannot do anything there. However, you can get a copy of your payment history from your mortgage company and provide that to the credit reporting agencies. Then they will contact the mortgage company who will not dispute it usually.
    Answer Applies to: Idaho
    Replied: 1/17/2014
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    All the lenders are doing this, but you are allowing yourself to be a victim. There are plenty of other things you can & should be doing to rebuild your credit so you don't need this mortgage to improve your credit score. If you are looking to refinance, you may have missed the boat on getting the best rates, as interest rates on mortgages have gone up significantly in the last 6 months. Even so, to get a new mortgage loan, order an account history from your current lender this will show your ongoing payment record, and apply for a mortgage from another lender. Many credit unions have some attractive programs for those with a recent bankruptcy.
    Answer Applies to: Nevada
    Replied: 1/17/2014
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    It is a bankruptcy violation to report the mortgage payments unless you reaffirmed the mortgage.
    Answer Applies to: New York
    Replied: 1/17/2014
    Law Office of Mark B. French
    Law Office of Mark B. French | Mark B. French
    This is a common situation. Reaffirmation Agreements are voluntary and both the Debtor and Creditor have to agree to enter into one. For a number of reasons a Reaffirmation Agreement may not be filed. If no Reaffirmation Agreement is filed before the discharge, then your personal liability on the mortgage is discharged, but the mortgage company's lien remains in place. This makes your loan what lawyers call "non-recourse" meaning that if you do not make the mortgage payments then the Mortgage Company can take (foreclose on) the house, but cannot pursue you for any remaining balance. The downside, as you have discovered, is that the mortgage company typically will not report your payments to the Credit Reporting Agency. I do not know what district you are in, in our district the Court will not allow Reaffirmation Agreements to be filed once your Discharge has been entered. You might be able to provide copies of payment records to a new lender to get them to give you credit for the payments even though they are not shown on your credit report.
    Answer Applies to: Texas
    Replied: 1/17/2014
    Law Office of Michael Johnson
    Law Office of Michael Johnson | Michael Johnson
    Yes but you can file a motion to reopen file to file reaffirmation.
    Answer Applies to: Florida
    Replied: 1/17/2014
    Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
    Why on earth would you seek or believe legal advice offered to you be your lender? It is far too late to reaffirm a loan at this point - that would have had to be done before your discharge order was entered. But the real issue is that reaffirming mortgages is usually a really bad idea. It is true that your mortgage loan was discharged in your bankruptcy. It is true that the lender does not have to report payment history to the credit bureaus because the debt was discharged. It is also true that you can request a payment history from the lender that will reflect all your timely-made post bankruptcy payments. Applying for and responsibly using new credit will help you begin to re-establish your credit score. If you are in need of financing for a vehicle or for a new home, the lenders will understand the fact that you have a payment history but no recent credit bureau activity. Reaffirming mortgage loans is not required by the bankruptcy code. In fact in some jurisdictions the bankruptcy judges will not approve such agreements for that very reason. And in this real estate market, where so many properties are upside down in value, the reaffirmation of mortgage loans causes trouble far more often than solving problems.
    Answer Applies to: Colorado
    Replied: 1/17/2014
    William Bidwell, Attorney at Law | Bill Bidwell
    They are not holding you hostage, You effectively reaffirmed, sign the paper to address your credit score,
    Answer Applies to: Michigan
    Replied: 1/17/2014
    Danville Law Group | Scott Jordan
    Yes, unfortunately they can. You may want to contact your attorney, if you had one, as your district may have streamlined procedures for this type of situation.
    Answer Applies to: California
    Replied: 1/17/2014
    Marc S. Stern
    Marc S. Stern | Marc S. Stern
    This is a myth made up by lenders. There is no need to reaffirm. The workaround is to request, yearly, a statement showing actual payments made to the lender. Then contest the credit report with the statement from the lender. The credit reporting agencies will send verification but should report the payments.
    Answer Applies to: Washington
    Replied: 1/17/2014
    Moore Taylor Law Firm, P.A.
    Moore Taylor Law Firm, P.A. | Jane Downey
    I wouldn't recommend reaffirming.
    Answer Applies to: South Carolina
    Replied: 1/17/2014
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