What does a discharge mean for a mortgage, do we still have to pay the mortgage and why does the mortgage company do? 10 Answers as of December 29, 2016

The mortgage company does not know why the mortgage has been discharged.

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Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
The discharge applies ONLY to your personal responsibility to make the payments. If you decide that you want to walk away form the property you may. If there is a difference between what you owe and what it sells for, you do not have to pay the shortage. If you want to stay in the home you must continue to make the payments because the debt is secured by the real property. This is the difference between a "Note" which is your personal obligation and the "Deed of Trust" which is a lien on the property. You signed both when you bought the property.
Answer Applies to: California
Replied: 12/29/2016
Stephens Gourley & Bywater | David A. Stephens
You are discharged from your personal liability to pay the mortgage. However, if you do not pay it, the mortgage company can foreclose on the property.
Answer Applies to: Nevada
Replied: 12/23/2016
Eranthe Law Firm
Eranthe Law Firm | Cate Eranthe
It sounds like you had a bankruptcy discharge. The impact on a mortgage is to remove personal liability. The lien still exists and if you want to keep the house you must continue to make the payments. If you walk away and surrender the property there is no financial liability on your part to the lender however you should keep insurance in effect to protect from potential liability to anyone harmed on your property. The best course if you want to walk away is to wait until title transfers or have someone stay there to continue to maintain and upkeep the property. This assumes there was no reaffirmation which would mean there is no impact at all on the mortgage. The lender may refuse to send you statements and may not report your timely payments to the credit bureaus. If you want to stay make the payments and keep proof of your payments.
Answer Applies to: California
Replied: 12/23/2016
A Fresh Start
A Fresh Start | Dorothy G Bunce
A discharge of a mortgage only occurs in a Chapter 7 bankruptcy. This discharge means that although the lender can still foreclose, the lender cannot sue you to collect the underlying debt. So if you want to keep the property, you gotta pay the mortgage, as bankruptcy obviously will not get you a free house. But if you filed Chapter 13, the discharge did not include your mortgage.
Answer Applies to: Nevada
Replied: 12/23/2016
Portland Bankruptcy Law Group
Portland Bankruptcy Law Group | Christopher J. Kane
When you file bankruptcy and list the mortgage company as a creditor (which you have to do if you have a mortgage), the mortgage is technically discharged at the end of the case. But, the company retains its lien on your real estate. That means that if you ever default on the mortgage the only remedy for the mortgage company is to foreclose on the property, and they cannot come after you for a money judgment or if there is deficiency balance remaining after they sell the property.
Answer Applies to: Oregon
Replied: 12/23/2016
    Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
    Your question demonstrates how valuable a lawyer can be. It's almost always worth the investment. When you closed on your mortgage, you signed many papers. Two of them are (1) The mortgage itself, and (2) the mortgage note. The mortgage is the grant of a security interest in the property to the lender who is providing you the money to help buy the property, and the mortgage note is a separate document in which you promise to pay the amount you are borrowing, usually in monthly payments with a stated interest rate. Bankruptcy discharges your personal obligation on the mortgage note. With the rarest exceptions, it does not affect the mortgage-that is, the lender's security interest in the real estate. If you want to keep the real estate, you must (continue to) pay for it. You can do by signing a formal reaffirmation of the mortgage debt, which has its own benefits and costs, or you can just keep on paying the mortgage, and if you are current in your payments (including real estate tax and insurance) the lender in most parts of the country may not kick you out. And when you have made all the payments, they still have to give you clear title by 'satisfying' the mortgage on the real estate records. A reaffirmation must be filed with the Court before a discharge is granted. The benefit of a reaffirmation is that your payments are reported to the credit reporting bureaus, so timely payment helps your credit score. BUT, if you should fall behind, you will owe the total balance of the mortgage note. If you do not reaffirm, the lender will generally not report your payments to the credit bureaus (because they are not allowed to try to collect from you or make an adverse report to the credit bureaus if you have not reaffirmed the debt).
    Answer Applies to: Wisconsin
    Replied: 12/23/2016
    OlsenDaines | Rex Daines
    If you look through your loan documents you will find that there is no document called a mortgage. You will find a Note and a Trust Deed. The Note states that you are personally liable for the debt, the Trust Deed states that the property is liable for the debt. The Bankruptcy discharged the Note. Therefore, you are no longer personally liable for the debt. However, the trust deed remains on the property. Therefore, after a chapter 7, if a person wants to keep their home, they must continue to pay on the trust deed. If you do not do so, then the lender can foreclose the trust deed and take the home. The mortgage company knows they just pretend to not know.
    Answer Applies to: Oregon
    Replied: 12/23/2016
    GARCIA & GONZALES, P.C.
    GARCIA & GONZALES, P.C. | Richard N. Gonzales
    The Debtor's obligation to repay the mortgage company is discharged in a BK filing. However, if you want to keep the home, just keep making the mortgage payments. Of course, you have the option to just walk away from the home. Debtor's choice.
    Answer Applies to: Colorado
    Replied: 12/23/2016
    Patrick W. Currin, Attorney at Law | Patrick Currin
    Secured debts like a mortgage are not discharged in BK, merely your personal responsibility to pay. If you want the house, you must pay.
    Answer Applies to: California
    Replied: 12/23/2016
    Ronald K. Nims LLC | Ronald K. Nims
    Discharge means that you are no longer personally liable on the mortgage but the lender still has a lien on your home and can foreclose if you don't make the payments.
    Answer Applies to: Ohio
    Replied: 12/23/2016
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