Why Home Loans Should Not Be Reaffirmed

I saw a good blog entry written by San Diego attorney Miachael Doan about reaffirmation of home mortgages.Why Home Loans are not Reaffirmed : Bankruptcy Law Network. I have tried over the years to discourage my bankruptcy clients from reaffirming home mortgages. The problem is that some of the prominent mortgage companies, including Chase Home Mortgage for example, send letters to bankruptcy clients telling them to reaffirm. Some clients report that their mortgage company will not send monthly statements or payoff numbers if the borrower does not reaffirm. Mr. Doan's blog entry explains why reaffirmation of home mortgages is legally not required. If you reaffirm your mortgage after bankruptcy and subsequently are unable to make the mortgage payments you will be personally liable under the mortgage note if you signed a reaffirmation agreement. If you refuse to sign a reaffirmation agreement Chapter 7 bankruptcy eliminates personal liability in the event of future foreclosure.

Comments

[Eugene]

I have filed chapter 7 in 2008. Got my discharge in December of 2008.

My first and second mortgage were included in bankruptcy even so I was current on both of them. I stopped paying on these mortgages in March 2009. I would like to modify my first mortgage based on HAMP and to get rid of second one ($60,000)by offering $1000 to the bank. If they accept will I be taxed for this forgiven debt?

[Deborah]

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Deborah

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