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Signing a Reaffirmation Agreement (BK chapter7) After a Loan Modification

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II live in California. I modified my first mortgage $240,000 at 2% under the HAMP program and my second $396,000 also HAMP at 1%. This rate is fix for 5 years. My first was easy to modify, but the second took me almost two years (Chase is extremely unreliable and difficult to deal with). The mod with Chase was finalized on Jun, 2011.

I am in the process o bankruptcy chapter 7, I went to the debtors meeting 2 weeks ago. I know I only have 60 days to do the reaffirmation. By all means I want to keep my home, even tough I owe more then the house is worth, I do want to keep it. My payments are affordable now. This days is extremely difficult to qualify for a home loan. It is a beautiful house located in an excellent neighborhood. I would not want to live anywhere else. My dilemma is should I reaffirm my mortgages, my attorney explained to me that if I want to keep the house I should reaffirm, but he didn???t go into details about it. Also Chase sent me the reaffirmation Agreement, but is very general in stating the terms of my modification. It just says the loan amount and that the rate is at 1% variable. It does not say that is fixed for five years and then will go up 1 point every year. It will go up a total of 4 point only during the life of the loan.

The reaffirmation agreement does not state that. I called Chase and they told me that the reaffirmation agreement does not have to include all the terms of the modification, that I am just reaffirming the debt. When my attorney first sent me the agreement, he seemed surprised that it was so broad, but now he tells me the same thing that Chase is telling me. I am very confused about it. Beside I don???t trust Chase at all; they are very tricky and always change things that they have previously said. That is why it was so difficult for me to do the modification; I had to complain to the OCC. Wrote a letter to Senator Dianne Feinstein and her office sent the complain to the OCC. Finally Chase executive office took care of my modification, but I am sure I had not complained and raise hell; they would not have given me the 1%. See they approved my for the 1% and lower the loan amount to 246,000 even though I still have to pay the difference before the 40 year term. But they had change their mind and then they did not want to give me the 1% under the terms stated. It was after I complained that they retracted and approved me at 1% with the lower loan amount. Since I don???t trust this company, I am very skeptical to sign an agreement that does not state the terms clearly.

Can you please tell me if it is normal to put in the reaffirmation agreement the complete loan amount, witch is $396,000 and the interest rate that I???m paying right now, witch is 1%? should they put the $240,000 instead and state everything that the modification papers say, including when the payments will go up and the maximum rate I will pay. Should the reaffirmation agreement also state that now I am paying 1% with a loan amount of $240,000 that the difference will be paid at the end of the term? Please tell me what to do; I am very confused right now my attorney does not go into detail.

If I don't sign the reaffirmation agreement, can Chase foreclose even though I am paying? is it a risk for me not to reaffirm? Will they send me statements? Will they report to the credit bureau my previous late payments?

Than you so much!




Here is how I see it:

1. If you don't trust the bank, demand to get everything in writing. Maybe the reaffirmation agreement does not have the basic terms of the modification but you can ask for another statement clearly stating the terms of the loan post BK and reaffirmation.

2. If you do not reaffirm, you will lose the house since the debt will be included in your BK file. That is why the reaffirmation, the agreement that you assume full financial responsibility of the loan even after filing BK.

3. You will most probably lose your home if you do not reaffirm. So its a huge risk.

4. Chase can foreclose.

5. Chase will most definitely report the late payments to the credit bureaus.

Sub: #1 posted on Fri, 07/27/2012 - 22:21

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