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Can lender offer a loan modification thats on a foreclosure and trick u into reaffirmation

Chicago, IL |

i am on the mortgage with co borrow beiing my sister i didint reaffirm after chapter 7 discharge if i sign a modification agreement through hamp am i being liable as to a reaffirmation agreement..

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Attorney answers 6

Posted

To truly answer that question, a lawyer would need to review the modification agreement. I do not think the mortgage company would be tricking you. A reaffirmation agreement only applies in a bankruptcy case and must be completed before discharge. If you did not reaffirm the debt and received a discharge, you no longer have personal liability for the debt. If you chose to make yourself liable for the debt after your discharge, by agreeing to a modification, it would be your choice. The mortgage company cannot force you to accept a modification. Were you planning to give up the property when you did not reaffirm the mortgage? If you have changed your mind and now want to keep the property, it may be worth it to accept the modification. Your best bet is to hire a foreclosure attorney to advise you.

Posted

Never sign any legal document without first showing it to an attorney.

Be sure to designate "best answer." If you live in Oregon, you may call me for more detailed advice, 503-650-9662. Please be aware that each answer on this website is based upon the facts, or lack thereof, provided in the question. To be sure you get complete and comprehensive answers, based upon the totality of your situation, contact a local attorney who specializes in the area of law that involves your legal problem. Diane L. Gruber has been practicing law in Oregon for 26 years, specializing in family law, bankruptcy, estate planning and probate. Note: Diane L. Gruber does not represent you until a written fee agreement has been signed by you and Diane L. Gruber, and the fee listed in the agreement has been paid.

Posted

No. The modification does not resurrect your liability. Only a decision of the bankruptcy court can do that.

Posted

You are perfectly free to sign new loan documents, that make you personally liable to the same lender, after a Chapter 7 discharge and the Bankruptcy Court need not rule on anything. Whether the specific documents you may be asked to sign actually do that requires reviewing the documents. You are only "tricked" if you make the choice to sign something without knowing what they say and what they mean.

Alan D. Walton

Alan D. Walton

Posted

HAMP guidelines specifically provide that modification of discharged debts does not restore personal liability upon modification.

Scott Benjamin Riddle

Scott Benjamin Riddle

Posted

A debtor does not have to modify under HAMP.

Posted

If it is truly a HAMP modification, done on the official HAMP forms, it should contain language stating that it does not create any personal liability if the loan was discharged in a bankruptcy, but you should have an attorney review it to be certain.

The above response is not intended to create, nor does it create either an attorney-client relationship or an ongoing duty to respond to questions. It is intended to be solely the educated opinion of the author and should not be relied upon as legal advice. Some responses may be advertising material. The response given is based upon the limited facts provided by the inquiring person and additional or differing facts might change the response. Attorney is licensed to practice law only in the state of Illinois. Responses are answers to general legal questions and the inquiring party should consult a local attorney for specific answers and advice. Answering this question does not create a duty to keep information confidential, nor does it prevent me from representing an adverse party. Advertising Materials.

Posted

Your underlying obligation to pay the debt was discharged with the bankruptcy. At this point, there is nothing that you can reaffirm and arguably modify. However, we see a lot of modifications that are processed and approved which contain specific language saying the debt is not being brought back to life and the bankruptcy is not being disturbed. You definitely need to have an attorney look at the document and see how the specific language in your modification agreement will affect your situation.