Be careful if your bank defers your mortgage or gives a forbearance that is actually a deferment which is what most are offering from what I have seen. That means at the end of the time that they have agreed for you not to pay, you will owe all the payments you missed. They may make a repayment plan for you, but they are not likely to just add the payments to the end of your loan and recast your loan which is what most people would think they would do and would want them to do. Aside for them not reporting late payments on your credit if they have agreed for you to miss payments or charging late fees, this is the same thing that happened back in 2005-2010 and it caused so many people to lose their homes. I know because I ended up selling a bunch of them. Please make sure you speak to your banks and get all the terms in writing. If you don’t agree with what they send or if they send something different from what you agreed to on the phone or online, do not sign it. Have them redraft it. Also, if they say you have to miss a payment before they will do anything for you, ask them if they are using Covid 19 protocols or their regular process. That is usually what banks say using their regular process. In addition, if a bank says they won’t report you missed payment during your deferment or forbearance agreement, make sure you have it in writing that they will Never report the lates. Even if you cannot make up all the missed payments when the temporary no payment forbearance periods end.
They are delaying the foreclosure process by not requiring payments and not reporting lates right away. However, once you cannot make-up a few months of payments at the end of the forbearance and cannot agree on a reasonable repayment plan…they usually want the money in a few months, historically, they report all the missed months of payments and the foreclosure process starts.
Also know that once you miss a mortgage payment and it is reported on your credit, many of your creditors will drop your credit limits significantly and may even cancel credit lines or cards you have not used. BofA is notorious for this and will drop current credit card limits to $100 Above whatever you currently have on the card. A mortgage late is the strongest hit to your credit as well as collections. So, if your plan is to not make your mortgage payment without making a no-report ever arrangement with your bank, and then use your credit cards to live on during this crisis, you need to rethink your plan because the credit you have available today may not be there once your mortgage late is reported.
If your credit cards are with the same bank you are not making mortgage payments to, they will likely freeze your credit cards as well.
So plan accordingly my friends and get everything in writing and don’t sign anything you don’t agree with.
Good luck out there. If you need a second pair of eyes on what the bank has sent to you, I would be happy to look at it and give you my opinion as a friend, but I am not an attorney, so know I am not giving you legal advice and am just giving you my opinion based on my personal experience going through this in 2009 and my experience representing homeowners and negotiating with banks for homeowners who experienced this.
Here is a diagram explaining the forbearance process.
Good luck out there my friends.
#donttrustbanks #cantpaymymortgagebecauseofCovid19 #cantmakemoneycovid19 #forbearanceprocess
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#loandeferment
