Forebearance = trial period?

[kcchica]

I heard from Bofa today about our modification request..

A little background.. called 5/7/09, paper work faxed 5/8/09, analyst assigned 5/18/09, called several times and was told 30, then 30-45 days. I was able to request a status update after 30 days, so on 6/19 I was told that the analyst was scheduled to work on my file, today july 1st. I received a call from her today!!

Anyway, because we are current on our loan (because we have gone through our savings account), we have to do a 4 month forebearance, paying half of our payment. Of course the other half X 4 months will "be due" at the end of the forebearance if they can't work with us. Assuming we still qualify for the modification, the "back due" amount will be rolled into the new loan. I did confirm that they will not report late payments and that the paperwork they are sending SHOULD also state this.

Anyway, is this forebearance, the same thing as a trial period that I have read about. I asked about another " wait" and they said there shouldn't be. However, I want to be sure. 4 months puts us all the way to our November payment, which seems so long to be in limbo.

We also have to save a little more each month, because they want a $200 surplus to qualify.... So I am working harder on our numbers.

[Murray12]

It seems to me that this is a Making Home Affordable Modification as the trial period is 4 months if you are not late on the mortgage.

If you were honest with the info you submitted and it is the same in 4 months, there should be no reason why it would not go through.

Not sure why they are looking for a surplus if this is a making home affordable mod. The Making Home Affordable mod is based only on your income and mortgage payment and not your other bills.

[kcchica]

Hi. Yes it is the Obama plan, sorry I didn't state that. I actually am calling back tomorrow to adjust my numbers a bit, because I realized that when I talked to her today (I was out of the house) and the numbers she quoted back to me, seemed reasonable, but were not the numbers I submitted on my paperwork. I think they were the original numbers I gave the 1st person I spoke with on the phone when I was trying to see if we qualify (and they were quick estimates at the time). Anyway, I want to make sure our current info is good with them, I don't anticipate any changes in those over the next 4 months.

Thanks for confirmation on the 4 month trial for those not behind in payments, I hadn't seen anyone refer to this yet (I have read quite a few different stores on here). I had only seen the 3 month trial payment thing mentioned which doesn't really apply to us, as we have been making our payments on time.

[Murray12]

Did they qualify you before they saw your documents? or did you have to send your income info etc.

From https://www.efanniemae.com/sf/guides.../2009/0905.pdf page 20

The trial payment period is three months long for mortgage loans where the
payment is already in default and four months long for mortgage loans where the servicer has
determined that a borrower’s payment default is imminent but no default has occurred.

[kcchica]

They pre-qualifed us over the phone, but that was just to get the paperwork rolling. We then received a generic letter about how they know we are experience financial hardship and they want to help us avoid foreclosure, etc, etc. They sent us a financial statement worksheet to fill out, and we had to send a hardship letter (googling help for that is how I found this forum in may) and also pay stubs.

From there, my timeline applies... our first real coversation with someone was today.

[kcchica]

Oh and thanks for the link, that makes me feel more comforable about hte 4 month forebearance. They are cutting our payments in half for this period... with of course the full "default" amount due at the end if we end up not qualifiying (which hopefully doesn't occur), otherwise the "default" amount is rolled into the new modified loan. Basically we were told we had to be in "default" to modify and this was the way to do it.

[ILResident]

I don't believe the Forbearance you have been offered is part of the trial period of a Making Home Afordable Modification but rather a "HomeSavers Forbearance Plan". I recently received the same type of contract stating that I should pay 1/2 my loan for the next 6 months and then they may or may not modify my loan. I am confused as well as the information in 09-05R from Fannie Mae states that this is an alternative program and available for those who do not qualify for a Making Home Affordable modification. In your case it will probably be of benefit as then you only have to pay 1/2 your mortgage. I, on the other hand haven't paid my mortgage for over a year so I'm very hesitant to resume paying once again if foreclosure is inevitable.

[kcchica]

I am hoping that it isn't the Home Saver program, as I am not sure what the point of that would be. The anaylst made it seem like the 4 month forebearance was necessary to show "default" in order to qualify. And the document link provided by Murray12 above, does talk about a 4 month trial period for the HAMP program for those that are not in default. At the end of the same document, it mentions the Home Savers program, and how its a 6 month forebearance. I can't recall my anaylst mentioning the "home saver" program, so hopefully that isn't the case. For those that were offered it, and have paperwork about it, did it clearly state "Home Saver"? I have a call in to my anaylst to update our budget information, I want to make sure that everything is perfect, so that there isn't some red tape/lets start over again "crap" after this 4 month period.
:-)

[ILResident]

It sounds like you are right about it not being a HomeSavers Forbearance Plan but rather a program designed for those who are not in default. In the correspondance I received it specifically states that "I qualify for the Fannie Mae HomeSaver Forbearance program". The program you described makes a lot of sense for someone like yourself, as you get temporary relief from a full mortgage payment while a modification is being worked on. I've been told that the trial payment amount probably won't differ much than what the modified payment will be so I'm hoping thats true.

[conbon70]

I am one month behind on my mortgage with GMAC.
I called them today to see if there is a Forbearance program that I can
do while waiting on the loan modification. I was told that I currently owe $2065 + $87 late fee for June and $2065 for July. I told them that I do not have this but I had $1800. The told me that they do not allow partial payments. I was then told that they can put me on a 6 mos. program where I pay $1978 with in 10 days and then staring on Aug. 18 I will pay $2400 for the next 6 mos.
I am so confused...my usual monthly payment is $2065...I asked for help and they tell me that I will need to pay more for the next 6 mos.
Any advice??

[ILResident]

Based on my experience there are a couple of options available to you as far as a Forbearance Program is concerned. I'm not sure what GMAC permits but I'm thinking if yours is a Fannie Mae loan they should offer something along the same lines.

When I first became I delinquent Countrywide granted me a year long forbearance where I did not make any mortgage payments and nothing negative was reported on my credit. If they would not agree to that then they may be able to offer the same type of arrangement with reduced payments for a period of time. That is what I have currently been offered through BOA but seeing that I am already 19 months behind and a modification is not guaranteed, foreclosure might be inevitable. If that is the case then it is senseless for me to accept the Forbearance contract I have been offered.

[osfan]

conbon, they way I got on my forbearance plan is like this.

I did exactly what you did- I called them and said I can't make a full payment, but here is what I got and they said no thanks. (incredible really in this economy!)

I called and said I want on the obama plan, I want a 3 month trial at 31% of my income. They put me on hold for about 10 minutes, came back and said I can't put you on the obama plan today, but I can get you a 2 month forebearance at 31% of your income.

My advice to you is that each rep you get, you get a different answer. Keep calling, calling, calling until you get this type of setup. They can do it, I am proof. I was probably about 2-3 months behind when they set this up.

[conbon70]

osfan,
are you with GMAC? I can make my payments if they were 31% of my income.
I have filled out all of the Obama Loan Mod docs and I was told it would be about 45-60 days before I hear anything on that. I will call back and ask them to put me on this now. Worth a shot.
thanks

[kcchica]

I received my "forebearance agreement" this week. It doesn't state Home Savers anywhere on it. Of course it also doesn't state that the point of it is to "get behind" either. Since are current in our payments. It doesn't really explicitly state anywhere, "'this will not be reported as late". What sort of wording would I expect to see to that effect. I asked about it over the phone and and they said it wouldnt affect our credit, and confirmed it would be in the paperwork. It also doesn't really say what will happen in 4 months. We are supposed to pay 1/2 payments for 4 months, including July. Of course I had already paid July, so they are wanting me to just skip August, and they will pay my 1/2 payment for August, from July's full payment.

I am just curious, if there is any wording I should be looking for with this "forebearance agreenment" that deals with our credit or the future of our modfication, or if those sorts of things just aren't listed on a forebearance agreement. I guess I am a little confused by the idea that we are signing something that states a default has occured and this is the banks way of helping us, when in reality we haven't defaulted yet and this is the banks way to officially "get us behind" to qualify... It clearly states that no initial contribution is due ($0) on the actual payment schedule...
This is bofa. Does anyone have similar circumstances with the process and bofa?

[Murray12]

First off - YOU DO NOT HAVE TO BE LATE TO QUALIFY FOR THE MAKING HOME AFFORDABLE MODIFICATION. Sorry for the caps just want it to stick out for anyone getting here by Google or scanning the page.

Do you have a hardship? If you have a hardship then you can qualify for the HAMP program. The link I provided above shows some of the hardship examples.

You do not have to accept the forbearance. It seems to me that banks are just trying to put people in forbearance agreements. Banks are starting to get pressure to perform the modifications and there are going to be reports on individual banks in regards to their modification progress.

If this is a Fannie/Freddie loan you don't have to worry about a surplus. The 31% is strictly based on your montly housing debt to income ration.

[kcchica]

Hi, thanks for the reply. The whole point of the 1/2 payment forebearance plan was to get us "behind" to show our investor its necessary. We have had a loss of income because of the economy and my husband's job is in new home construction.
In addition besides wanting us to do this 4 month plan, the anaylyst wanted us to work on our budget.. and drop $200, so that we had about a $200 surplus.
We are Fanny Mae, but I am at a loss what to do about the situation. Since the bank is working with us, I want to keep moving forward. Although I was disappointed by the forced 4 month delay (in the form of a forebearance). Since the guideline link you posted discussed a 4 month "trial" period (again why.. I don't understand) for people not behind. Are you thinking we could actually just keep making our payment?
I so don't understand why we have the 4 month trial thing. I also don't want to "upset" the bank and have them stop working with us too...

We did sign the document, although again, we made a whole payment in July because we had already done so prior to receiving the paperwork.

[Murray12]

I wouldn't be afraid of "upsetting the bank". It seems the squeaky wheel gets the grease. This is from efanniemae.com...

HomeSaver Forbearance
HomeSaver Forbearance is a new loss mitigation option available to borrowers that are either in default or for whom default is imminent and who do not qualify for the HAMP. A servicer should offer a HomeSaver Forbearance if such borrowers have a willingness and ability to make reduced monthly payments of at least one-half of their contractual monthly payment. The plan should reduce the borrower’s payments to an amount the borrower can afford, but no less than 50 percent of the borrower’s contractual monthly payment, including taxes and insurance and any
Announcement 09-05R Page 31
other escrow items at the time the forbearance is implemented. During the six month period of forbearance, the servicer should work with the borrower to identify the feasibility of, and implement, a more permanent foreclosure prevention alternative. The servicer should evaluate and identify a permanent solution during the first three months of the forbearance period and should implement the alternative by the end of the sixth month.

So they are basically saying you don't qualify for the modification. I would ask them why. I would also call Hope Now. I know people aren't fans of them, but I thought they were very helpful.

[kcchica]

Thanks for the reply, I appreciate the time and thoughts!

I don't understand the homesavers program at all either. Unless someone's financial issue is temporary. What good does paying less for only 6 months help someone unless they will be making more (which isn't our situation).

We are supposed to pay almost exactly 1/2 of our regular payment, but only for 4 months (not 6) and she did say the point was to show the investor that we were in default. She also mentioned that the default amount (= 2 full payments at the end of the forebearance) would be either due immediately or rolled into our new loan.