Am I Disqualified From HAMP Mortgage Modification If I Did Not Reaffirm My Loan In Chapter 7?

You Are NOT Disqualified From HAMP Modification

Clients will sometimes tell me that their mortgage company/servicer told them they do not qualify for a mortgage modification because the client did not reaffirm their mortgage in the Chapter 7 case.  That is simply not correct. Period.

Making Home Affordable – Supplemental Directive 10-02

On March 24, 2010, the federal Making Home Affordable program issued “Supplemental Directive 10-02 (Home Affordable Modification Program – Borrower Outreach and Communication)”. In that Directive, the federal government made it clear that a homeowner is NOT disqualified for a HAMP modification just because they did not reaffirm the mortgage debt in a Chapter 7. The Supplemental Directive says, in part (emphasis added):

Borrowers who have received a Chapter 7 bankruptcy discharge in a case involving the first lien mortgage who did not reaffirm the mortgage debt under applicable law are eligible for HAMP.

Further, that Directive goes on to confirm that a debtor does not reacquire personal liability on a HAMP modified mortgage (not reaffirmed) by simply obtaining a HAMP modification. The Supplemental Directive says, in part:

The following language must be inserted in Section 1 of the Home Affordable Modification Agreement: “I was discharged in a Chapter 7 bankruptcy proceeding subsequent to the execution of the Loan Documents. Based on this representation, Lender agrees that I will not have personal liability on the debt pursuant to this Agreement.”

Finally, the HAMP Frequently Asked Questions also make it perfectly clear that not reaffirming the mortgage does NOT disqualify a former debtor from a HAMP modification.

Free Initial Consultation

We are happy to help you work through these potentially confusing issues. We offer a free initial consultation on these questions. Just let us know if we can be of assistance.

 

 

 

Comments

  1. Gabriella Potts says

    HI ROBERT,
    I FILED BK OCT.7,2015. I TOLD MY ATTORNEY,I WANTED TO REAFFIRM MY MORTGAGE. MY BK WAS DISCHARGED IN JAN. 2016. I ALSO WAS IN PROCESS OF A LOAN MOD. I GOT THAT, THEN THEY SOLD MY MORTGAGE,, I FOUND OUT LATER MY LOAN WAS NOT REAFFIRM, SO MY PAYMENTS ARE NOT REPORTED TO THE CREDIT BUREAU. I AM UP TO DATE ON EVERYTHING. THE NEW MORTGAGE SAY THEY CAN NOT REPORT WITHOUT REAFFIRM PAPERS. CAN U TELL ME WHAT I CAN DO TO GET REPORTED TO CREDIT BUREAU? PLEASE HELP

    Thanks

    • You have a common question. Here is an article I wrote on the subject. https://robert-russell.com/mortgages-reaffirmation-agreements-credit-reports/ This should answer that question. But, in short, credit reporting agencies do not have to report anything ever. Simply, if they do, it has to be accurate. With a discharged debt, you don’t personally owe the debt. Thus, credit reporting agencies might reasonably choose not to report on a debt you do not personally owe. Also, if they do report, they have been sued in the past if the information reported is negative, i.e., missed payments on a discharged debt. So, I doubt they will voluntarily report the post-petition payment history. SO, take a look at the article. I hope this helps.

  2. really nice information, thanks for your information.
    but i have a request can you give me more information about Affordable bankruptcy lawyer

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