Expert: Mark J. Markus- California Bankruptcy Attorney - 12/10/2009

Question
Hi Mark, i recently filled ch 7 bankruptcy, and planning on reaffirming, However , i have two mortgages via an 80%,20% which were my original financing terms when i purchased my home in dec of 06. When i purchased, it was for 145,000. Chase had 80% which was 116,000, and gmac had 20% or 29,000. Since then my homes value has depreciated to 115,000.I plan to reaffirm the 80%, however not quite sure about the 20%, which by the way it's an interest only loan. I understand that if i don't reaffirm, gmac has a lien on the property, and can come against me , but to what extent. Being that there is another lien on the property via chase at 80%. In addition the value has dropped to about even with what i owe chase bank (about 114,000.)Can chase morgan bank , or should i say Will chase let them come after the home when they have the higher stakes on the property? Also im not being represented by a lawyer, and on one of the reaffirmation agreement forms it says that there is a negotiation process, and i tried to negotiate the interest rate, and they said no. Also gmac which has the 20% loan wants to charge $200.00 to send me the reaffirmation agreement form, is that the only way to reaffirm? , being that my funds are limited, to the extent of having to pay the $200.00.

                                    Thanks in advance.

Answer
I have never found it necessary to do a reaffirmation agreement on a real estate loan.  The secured creditors retain a lien against your property regardless of whether you reaffirm the debt or not.  What you give up by reaffirming is the ability to discharge any potential deficiency judgment against you in the event of a subsequent foreclosure sale.

http://www.bklaw.com/