Loan Modification Forum - LoanSafe.org - View Single Post - Modification? Forebearance? I'll Flip a Coin!

MollyM · 02-03-2009, 08:41 AM

Beware of Forebearance.

Forebearance agreements usually require that you "accept" all amounts they say are owed. So you would not be able to redress any issues where your payments are applied or how they are applied.

Forebearance DOES affect your credit- as you are technically in default. It does NOT stop a forclosure- only delays it. In cases like this- it is allowing you to go into default, so that you can qualify for a mod.

Forebearance agreements can alter the terms short term- so an inscrupulous company can raise the rate of interest, still charge late fee's on the origional amounts that are technically "late" & open the door for force placed insurances, corporate advances & escrow issues. Once you sign a forebearance- you are signing that you accept all charges that they deem are necessary. Good luck with trying to understand how your payments are being applied.

Forebearance allows the mortgage company to alter the terms- often in how they are applying your payments. So they could legitimatly SPLIT your payments to pay their fee's= leaving your P&I in further default. I have seen this happen more than once.

Forebearances can be very tricky- & usually are to the profit of the servicer- & nobody else (servicer's get to keep all fee's they deem necessary in the collection of the note) The investors & trustee only see that you are technically in default.

Please remember that servicers make more money on your loan when you are in default. Normally,They make only a small percentage of your loan payment for being a bill collector. The rest goes to the trustee for them to distribute to the investors. BUT- they get to keep all the late fee's, service fee's, property preservation/inspection fee's, Drive by photo fee's, & attorney fee's. If you sign a forebearance- or once you are involved with the mitigation department-you will start seeing some of these fee's appear. It happens with ALL the servicers.

They can be used to help one get to that "mod" qualification, but beware the small print. The devil is in the details. Beware.

02-03-2009, 08:41 AM	#11 (permalink)
MollyM Junior Member Join Date: Jan 2009 Posts: 3 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Re: Modification? Forebearance? I'll Flip a Coin! Beware of Forebearance. Forebearance agreements usually require that you "accept" all amounts they say are owed. So you would not be able to redress any issues where your payments are applied or how they are applied. Forebearance DOES affect your credit- as you are technically in default. It does NOT stop a forclosure- only delays it. In cases like this- it is allowing you to go into default, so that you can qualify for a mod. Forebearance agreements can alter the terms short term- so an inscrupulous company can raise the rate of interest, still charge late fee's on the origional amounts that are technically "late" & open the door for force placed insurances, corporate advances & escrow issues. Once you sign a forebearance- you are signing that you accept all charges that they deem are necessary. Good luck with trying to understand how your payments are being applied. Forebearance allows the mortgage company to alter the terms- often in how they are applying your payments. So they could legitimatly SPLIT your payments to pay their fee's= leaving your P&I in further default. I have seen this happen more than once. Forebearances can be very tricky- & usually are to the profit of the servicer- & nobody else (servicer's get to keep all fee's they deem necessary in the collection of the note) The investors & trustee only see that you are technically in default. Please remember that servicers make more money on your loan when you are in default. Normally,They make only a small percentage of your loan payment for being a bill collector. The rest goes to the trustee for them to distribute to the investors. BUT- they get to keep all the late fee's, service fee's, property preservation/inspection fee's, Drive by photo fee's, & attorney fee's. If you sign a forebearance- or once you are involved with the mitigation department-you will start seeing some of these fee's appear. It happens with ALL the servicers. They can be used to help one get to that "mod" qualification, but beware the small print. The devil is in the details. Beware.