Review Mortgage Lenders

Mortgage Forbearance

A guide to mortgage forbearance

In today`s economy many people are having trouble meeting their financial obligations. As a result of this there have been a large amount of homes that have been abandoned by their owners or foreclosed by the banks. Lending institutions were a little too generous in giving large loans to people who could not possibly afford to keep up the payments. The price of housing was in a bubble for a long time and when that bubble finally burst many people discovered they were stuck with high mortgage payments and property that was worth less than the cost of their mortgage.
In the past few years things have stabilized somewhat and lenders are now much tighter when it comes to their lending policies. There are, however, people who can get into temporary financial difficulties and these are the individuals who are ideally suited to a mortgage forbearance agreement.
So what exactly is a mortgage forbearance agreement? It is an arrangement or agreement made between a delinquent borrower and their mortgage lender. The lender agrees to forego the legal right to foreclose on the mortgage, while the borrower agrees to a mortgage plan designed to bring the borrower up to date on their payments over a certain amount of time.
Mortgage forbearance agreements are not long-term solutions for borrowers who are delinquent in their payments, but rather it is designed to help borrowers who are experiencing temporary financial setbacks caused by unexpected events, such as illness or unemployment. Individuals who have bigger financial problems, such as adjustable rate mortgages that had their interest rates reset to unaffordable levels, usually have to seek other remedies than mortgage forbearance agreements.
Pros and Cons of Mortgage Forbearance
In simple terms, mortgage forbearance makes it possible for the borrower to stop making mortgage payments. This is a plus for those who cannot make payments due to unforeseen circumstances. It can help people to avoid foreclosure and losing their homes. This is especially helpful for those who are suffering from a sudden illness that prevents them from going to work. Being made homeless on top of being ill and unable to work is a situation in which no one wants to find themselves.
Being able to stay in your home and knowing you have a respite from bill payments can speed the healing process since so much illness is caused by financial stress. Being able to keep the home you worked hard for is a lot better than having your home foreclosed.
Unfortunately, this solution is only temporary and usually only lasts over a period of several months until the homeowner can get back on their feet financially. Lenders are not doing this out of the kindness of their hearts but because they feel that they will wind up with more money from repayment of the original mortgage than from a foreclosure sale.
The homeowner must also keep in mind that while the payments are not being made, the interest rates on the mortgage continue to accumulate and are added to the remaining loan balance. Homeowners are generally required to sign forbearance agreements that state the date by which they are required to start making payments again. Once the forbearance period is at an end regular monthly payments will have to be made again. There are companies such as that specialize in helping homeowners with financial solutions.

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KIYC: Mortgage company still appears to ignore NJ law with Sandy victims

Despite two previous Kane In Your Corner investigations into their conduct, a national mortgage company still appears to be ignoring New Jersey law in their dealings with a couple that survived Superstorm Sandy.

Phone recordings show a representative from “Mr. Cooper” – a division of Nationstar Mortgage – demanding payment, even after he is informed that the mortgage on Jim and Carol Ferraioli’s Middletown home is supposed to be frozen until 2019 under state law.

“Right now the account is ten payments past due,” the company’s loan officer can be heard telling Jim Ferraioli. We need a minimum of eight of those payments.”

When Ferraioli explains his mortgage is in forbearance pursuant to state law, Mr. Cooper’s representative plows on. “Forbearance Act? I’ve never heard of that. The options we have available here are a repayment plan… or we can apply for a possible loan modification.

Can A Bank Break a Promise?

(WSVN) - South Floridians are left suddenly stunned by their mortgage payments. They say their mortgage companies are breaking an important promise. It’s tonight’s edition of Help Me Howard with Patrick Fraser.

As you ride through any neighborhood, they are just houses … unless one is your house.

Rodrigo Escobar, mortgage payments deferred?: “My children grew up here. It’s more than a house. It’s everything.”

As Irma approached, Rodrigo and his family left South Florida. They returned to find their home was fine. Their yard, a mess…

Rodrigo Escobar: “The fence fell down in the back, trees went down front and back, so all of this had to be cut and repaired and paid for out of pocket.”

As the repair and clean up bills rolled in, money was tight for a lot of people. And then South Floridians watching Help Me Howard saw the break they needed regarding their house payments.

Malloy Evans, Fannie Mae: “And then they can immediately put you into this forbearance period that allows you to take a break from making your mortgage payments.”

Is it normal for banks to continue charging late fees while a mortgage is in forbearance?

I have a forbearance agreement with Wells Fargo for one year so I can catch up on my mortgage payments. They are continuing to charge me a late fees on the 17th of each month. Is this normal practice or just plain evil?

If they are charging late fees, there or 3 possiblities:
1. Your payments are not being made in accordance with the forbearance agreement.
2. You only THINK you have a forbearance agreement.
3. Wells Fargo is incompetent.