Q: Hello, I have a question related to bankruptcy and home ownership.
I'm a first time homeowner that purchased my home in 1998. I have been living in my home for almost twenty three years. Due to economic hardship, I had to file for chapter 7 bankruptcy in 2010. It has been discharged and no longer showing on my credit report. My question is, what are my rights as a homeowner when and if I decide to sell my home? When I filed my bankruptcy, I never listed my mtg loan acct, but my mtg company says my acct is under bankruptcy and it doesn't show up on my credit report, but I still get statements with my name on them, I still reside in my home as well, and I still make payments each month? If I never listed the account in bankruptcy, then why does my mtg company says it is? I do have the option to reaffirm the debt, but haven't done so as of yet. I'm not in foreclosure and I have a loan remodification currently. My home need repair work done, but my loan isn't showing up on my credit so I can get a home improvement loan. Can the mtg company do this?
A: Well, I hate to tell you, you don't know quite as much as you think you do. You mentioned that you have the option to reaffirm your loan. You most definitely do not have that option, as it was off the table after your Chapter 7 discharged in 2010. To be quite frank, I never advise clients to Reaffirm on their home loan, although there may sometimes be a good reason in a particular circumstance. I am surprised that you did not list the home loan in your Chapter 7, since you are required to list ALL of your creditors. Usually the Bankruptcy Trustee will catch that if your lawyer doesn't. (It seems pretty straightforward as most Chapter 7 debtors have a loan and do not own their home outright - If there is no lien/loan against the property it would likely be sold by the Trustee for the benefit of the Creditors and the Bankruptcy Estate.).
Your situation is actually quite common. You received a discharge, you did not lose your home, and the Creditor (obviously) continues to accept your loan payments. They are not going to foreclose, as they have not in all these years and I doubt that your loan provisions would allow it, They are being jerks and not reporting your payments to the Credit Bureaus. This may seem unfair, but they are allowed to do this --- they are not required to report your payments, My recommendation is that you refinance through a lender who is familiar with this situation - get away from the Lender who has treated you poorly. Also, even if it has not been reported to the credit bureausa, you can
obtain your payment history from the Lender by making a Qualified Written Request (QWR) pursuant to the Real Estate Settlement Procedures Act (RESPA) -- LOOK IT UP-- and by Law they must comply. The Statute sets out the requirements and the request must be WRITTEN. I hope that helps. Your situation is probably not as dire or desparate as you may feel.
Timothy Denison agrees with this answer
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