Can a lender refuse to reaffirm and then foreclose on your home?

[mark2472]

What is the name of your state (only U.S. law)?
Tennessee

Hello, I am in the process of filing chapter 7 bankruptcy pro se and I want to make sure that I do not lose my home. I have a very small amount of equity in my home that is exempt, so the trustee will not be selling my home to pay creditors. I am current on my mortgage and I want to keep my mortgage as if the bankruptcy never happened, but my mortgage is currently through Chase and I have heard that Chase does not like to reaffirm.

So, my question is this... in Tennessee, can Chase refuse to reaffirm my mortgage and then foreclose on my home even though I stay current on my mortgage payments? I have looked and looked for an answer to this question and cannot seem to find out if there are laws in Tennessee that will keep a mortgage company from foreclosing due to bankruptcy even though I stay current on my payments.

 

[LdiJ]

What is the name of your state (only U.S. law)?
Tennessee

Hello, I am in the process of filing chapter 7 bankruptcy pro se and I want to make sure that I do not lose my home. I have a very small amount of equity in my home that is exempt, so the trustee will not be selling my home to pay creditors. I am current on my mortgage and I want to keep my mortgage as if the bankruptcy never happened, but my mortgage is currently through Chase and I have heard that Chase does not like to reaffirm.

So, my question is this... in Tennessee, can Chase refuse to reaffirm my mortgage and then foreclose on my home even though I stay current on my mortgage payments? I have looked and looked for an answer to this question and cannot seem to find out if there are laws in Tennessee that will keep a mortgage company from foreclosing due to bankruptcy even though I stay current on my payments.

As long as they are being paid on time, they won't foreclose even if they don't reaffirm. A foreclosure is no more in their best interests than it is in yours, if they are getting paid on time.

 

[mark2472]

As long as they are being paid on time, they won't foreclose even if they don't reaffirm. A foreclosure is no more in their best interests than it is in yours, if they are getting paid on time.

If the mortgage is not reaffirmed, is there something preventing them from foreclosing after I have a significant amount of equity in my home?

 

[justalayman]

If the mortgage is not reaffirmed, is there something preventing them from foreclosing after I have a significant amount of equity in my home?

yes; full and timely payments as you agreed to

 

[mark2472]

yes; full and timely payments as you agreed to

Does that legally keep them from foreclosing or is it because it's in their best interest not to foreclose? I've heard of lenders deciding to foreclose on a home where the mortgage wasn't reaffirmed, and I just want to make sure we won't lose our home. I also want to make sure this won't come back to bite me 20-25 years from now when our mortgage is almost paid off.

 

[LdiJ]

Does that legally keep them from foreclosing or is it because it's in their best interest not to foreclose? I've heard of lenders deciding to foreclose on a home where the mortgage wasn't reaffirmed, and I just want to make sure we won't lose our home. I also want to make sure this won't come back to bite me 20-25 years from now when our mortgage is almost paid off.

They still will have a valid lien on the house until its paid off. Therefore the bankruptcy really does not effect them in the same way that it effects other creditors. Once again, as long as you are making the payments, on time, every time, you will be fine. The problem would be if you became late with any payments. Yes, if you were more than 30 days late with a payment they would foreclose. Just don't be late.

 

[tranquility]

The key takeaway is that you are not in charge. Your sole goal is to make the mortgage company happy. Paying by your agreement makes them happy.

That may make others unhappy. The interaction between the two is what you are in litigation about in BK. Does your homeowner's protection help you? Yes. But, it is not all. Everything depends on the manipulation by the lender's attorney. No answers can be given beyond; keep him happy. (If your goal is keeping your house.)

 

[bigun]

SInce you're filing pro se, the judge assigned to your case will hold a hearing to determine if, reaffirmation is in your best interest and does not constitue an undue hardship.
If the judge refuses to sign off on the reaffirmation agreement, many districts have ruled that all the bk code requires is you offer to reaffirm. It does say the reaffirmation must be accepted. As a result, you stay and pay.
You may want to research how your district handles rejected reaffirmations.

You may want to take a look at this thread from another site.

http://www.bkforum.com/showthread.php?62833-Why-reaffirming-a-mortgage-is-a-very-very-bad-idea