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3 month Wells Fargo Special Forbearance Agreement

Discussion in 'Wells Fargo - American Servicing Company (ASC)' started by cplcho, Aug 23, 2009.

  1. cplcho

    cplcho LoanSafe Member

    I just got this in the mail after applying for a loan mod with Wells Fargo. I have never been late on my mortgage. I have 5/1 ARM @ 5.5% with a paymant of $2288.46 a month interest only.
    After a hard year and forced to pay peter with paul on some bills, i got a little over extended and needed to try to see if I could qualify for a lower rate or mortgage payment to try and survive this financial fallout.

    In this letter I got was a 3 month trial it seems. 9/1, 10/1, 11/1 payments of $2248.46 is due. It is exactly what I pay now. I dont understand.
    Is this forbearance a good thing or bad thing? If I make the 3 payments, will they try to modify loan and lock it in as my ARM is due to adjust soon. Does forbearance screw up my credit?

    So confusing, as it says I have to pay by the 1st of each month and has no grace period, while without this deal, i had til the 15th of each month b4 they charged me a late fee.

    Any help is much appreciated.
  2. Mandy

    Mandy LoanSafe Member

    Does it include your taxes and insurance?

    If you are not to sure, call them?
  3. ltravel

    ltravel LoanSafe Member


    I am currently on a similar forbearance agreement with Wells Fargo, making 3 payments 8/1,9/1,10/1 at our regular payment of $6127.78
    and then a last payment 11/1 of $1421 which still doesn't make any
    sense to me, but we'll see...... When we signed this agreement we
    were just about to go 30 days late on our June 1st payment, so in
    essence they let us skip 6/01 and 7/01 payments, but since we were
    running 29 days anyway it was like we saved 1 month. The catch was
    though that they were going to report a partial payment plan to the
    credit bureau's, and I did check all 3 just last week. They all show 30
    days late on a "partial payment agreement". Not sure how it affects the
    score as my husband has no other lates on his report and it's not like
    we're applying for any other credit right now, so by the time we need to
    it may not matter much as long as we end up with a modification.

    If you were not late to begin with, you made your 8/01 payment, and
    they are requiring you to make the first forbearance payment 9/01 then
    your credit report should be okay I would think. And you are right, there
    is no grace period. Our agreement stated the payment must be made by
    the 1st or it would be null and void, then we'd really be screwed. I made
    my 8/01 payment on 7/27 so that we would not show 60 days late, and
    made sure they credited it in time to the acct. I'll be making the 9/01
    pymt a couple of days early too, and so on. We just really want to avoid
    that 60 day mark on the report. 30 was traumatic enough for us! I would
    if I was you confirm with the Exec office that you will not be reported
    late if you are not missing a pymt.

    I call every couple of weeks just to make sure all is still on track and if
    they need any further docs from us. I do know we'll have to resubmit
    financials etc before or after the last payment and then just hope for
    the best at that point. I have really not seen many post forbearance
    modifications on this site with WF yet, but I would have to think they
    should start showing up soon as many complete all these 3 or 4 pymnts.

    Good Luck!
  4. auroraproblem

    auroraproblem LoanSafe Member

    I don't now much about the Forbearance Agreements; however, WF being a TARP fund recipient I would try to push for an MHA mod.

    In the OP 5.5 interest only being modified under MHA is not going to equate to a ton of savings. I was on an interest only as well (though almost 8%). The mod payment will have to have principle back into the calculation, which will negate some of the savings. Your interest rate is low already, so they can start at 2%, though it will step up. The mod payment will also have escrow calculated in (also a requirement I believe).
  5. cplcho

    cplcho LoanSafe Member

    do you have to mail payment in to the address provided in letter or can you walk into a wells fargo branch and make payment?
    Whats the # for exec office? I guess i will just call them.

  6. bccorona

    bccorona LoanSafe Member

    I'm on a similar plan with Wells. You must make your payments to the address they gave you or you can call them and do it over the phone. I would highly recommend you do the second option.
  7. bound to stay

    bound to stay LoanSafe Member

    Hi, all.

    I am new to this site and responding to threads, but I am taking a shot at this because I am in the position you all are talking about. I am educating myself on the Wells Fargo Trial Payment Plan & request for a loan mod that I received a few weeks ago. I meet the requirements for HAMP, Home Affordable Mod Plan. I also have never been late in paying my mortagage, and my husband and I are concerned about the clause in the paperwork talking about declaring us late or in default for three months while making the trial period payments. I went to the Freddie Mac site, http://www.freddiemac.com/sell/guide/bulletins/pdf/bll0910.pdf and found the info below. Also, the details and questions regarding my situation follow the Freddie Mac info. I plan on contacting Wells today with concerns about the default reporting referred to in the paperwork during the trial period payments. It seems that I have been lumped into the default crowd when I have been using savings money to stay current and hope for a reasonable loan mod soon.

    Credit Bureau reporting requirements

    [FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]Section C65.7(b)
    [FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]
    has been updated to reflect that Servicers must continue to report a "full-file" status report to the four major credit repositories based on the following: ​
    [/FONT][FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]

    [FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]For Borrowers that are [/FONT][/FONT][FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]current [/FONT][/FONT][FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]when they enter the Trial Period, the Servicer should report the Borrower current but on a modified payment if the Borrower makes timely Trial Period payments by the 30th day of each Trial Period month, as well as report the modification when completed [/FONT][/FONT][FONT=Times New Roman,Times New Roman]

    [/FONT][FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]

    [FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]For Borrowers that are [/FONT][/FONT][FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]delinquent [/FONT][/FONT][FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]when they enter the Trial Period or who fail to make timely Trial Period payments by the 30th day of each Trial Period month, the Servicer should report in such a manner that accurately reflects the Borrower’s delinquency and workout status following usual and customary reporting standards, as well as report the modification when completed [/FONT][/FONT][FONT=Times New Roman,Times New Roman]
    [FONT=Times New Roman,Times New Roman]More detailed information on these reporting standards will be published by the Consumer Data Industry Association. [/FONT]

    This is my story: Financial hardship struck as I was laid off in July 09 and some investment income dried up earlier in '09, but my husband is still working. I am upside down estimating a 60% loan to value (LTV). I have a 10/20 loan, interest only for 10 yrs. & P&I for the balance of the loan term. When the loan adjusts in 7 years to the P&I payment, my husband and I will be hard pressed to pay the new amount that doesn't include tax & ins. I pay our taxes and insurance now--no escrow.

    I contacted Wells in July and found out through a recording that the house loan was Freddie Mac, and called about three times before I reached someone to take my information by phone as I told the rep that I would not be able to continue making my regular payments for long. She asked for the household NET income and I believe that HAMP is based on the 31% of gross income?

    I waited about 2-3 weeks to get the info packet & must have it back to WF by Oct. 1st. QUESTIONS: Should I go with the Trial payments and just monitor my credit, or as one person suggested in this forum, make my regular payments for the three months that Wells has proposed as the Trial period thus avoiding negative credit reporting? There is about $500 diff. between my int. only pymt. and the trial period payment which includes a newly established escrow acct. According to Wells, I made my Oct. 09 pymnt. on Sept. 15th with the regular payment, and they are telling me to skip Oct. 1 payment, pay $850 for Nov. 1 due to making my regular payment in Sept., then the full $1289 trial payment for Dec. 1. My husband is concerned about this process, and I am hoping for some advice and info to make sense of this crazy situation. Any comments from those who have made it through this maze? Also, what is involved with the financial counseling? Anyone experienced that? Thanks. :confused:
  8. mimirayo

    mimirayo LoanSafe Member

    I know when I did the math on "forebearance agreements" with Wells my 4th payment was HUGE and included 85.00 a month late fees for all the months I was on the plan.
    That's crazy....THEY came up with the plan to help me get modified
  9. julier883

    julier883 LoanSafe Member

    Which address did you have to send your agreement to? WOuld you please share it with me as the letter i received have no instructions on which address to send the signed agreement to. Thanks
  10. ichartem

    ichartem LoanSafe Member

    Hello, 1st time poster here......regarding forbearance agreement, I paid the 3 month agreement on time per the contract and i am being reported late on my credit report. I was assured time and time again that this would not have a credit impact if I fulfilled my obligation. I was subsequently denied a loan mod and came up with the required payment on time. I have subsequently put in a dispute with the credit bureaus. I don't know who the investor is on my loan (they won't tell me) but according to the above Freddie Mac letter I should not have the derogatory credit....any response/help would be appreciated. Also note that I was up to date on my payments before the forbearance agreement.
  11. judithoo5

    judithoo5 LoanSafe Member

    cplchop did you ever got your loan modification? come back and share your story please?
  12. yomann

    yomann LoanSafe Member

    I guess the 3-4 month special F.A. and getting quite common with WFB.
    We just got ours yesterday, at 55% of our regular payment.
    My thought is they want to see if we can sustain some level of payments, before going thru the effort of modifying loan documents.
  13. quana

    quana LoanSafe Member

    so anyone that was denied a loan mod after the forbearance.. what are the steps at that point.. have you been required to pay back all the past payments up front or is wf normally putting those on the back of the loan and starting fresh.

    i was put on a forbearance with the understanding it was a trial mod.. now from the forum, i was led to call and get more info..

    the truth is i was denied a mod due to excess expenses (they were calculating wrong) but becuz i had already signed the forbearance.. i had no recourse until the fobearance period is up..
  14. mimirayo

    mimirayo LoanSafe Member

    If it is the typical "forebearance" there are 3 payments, then a bulk payment. If you make the three payments you need to send in new paperwork before the fourth payment.
    Make sure you make the payments on time, and send the paperwork for the new mod request the same day you make the payment.
    Hopefully you will get looked at again before that bulk payment is due. PLEASE make sure you have ALL the documents you need from them, sometimes the workers send out old ones that are missing a page or two. I think you will be in a better position after the three payments, but there is no reason NOT to request the HAMP paperwork, I think you can do it even if you are in forebearance.....any one else know...please chime in
  15. quana

    quana LoanSafe Member

    yes its 3 mnths at half of my current mortgage.. it doesn't "mention" a 4th payment BUT it does have the language that at the end all past due monies are due.
    i was told to resend all documents again at that time..
    I sent them in again anyway right away because im hoping they might look at error they made and reconsider before the fa period is over..
  16. W. L. Davis

    W. L. Davis LoanSafe Member

    I am in the same situation as you. I have just been offered a SF from Chase. Three months of 1/2 mtg payment. First payment to be there by 3/1.

    Regarding this bulk payment at the end of 3 months, would that be the total of the 3 mtg payments unpaid portion? My payment is 753. My SF payment is 377. So in June, am I to be expected to pay my regular mtg payment plus the 377 x 3 months?

    The woman stated my loan would be rewritten at the end of the FA plan with the balance owed rewritten into the loan. I have a 101 grand loan on a home worth 116,000 apprx. I live in Californa. I had job loss, losing income of just under 60 grand a year to 37 grand in 2009.

    Thank you so much everyone and especially (((Moe))))
  17. in the cold

    in the cold LoanSafe Member

    We are with WF and we were denied after our 3 month trial, actually we made 5 reduced monthly payments during the trial period. The letter explained that we would have to pay the difference of those 5 payments along with 2 months they let us off ON TOP of our original monthly payments for the next 6 moths. Thats when I found the exec number and we just got a new packet today to start the process over....
  18. mimirayo

    mimirayo LoanSafe Member

    Yes. A "Special Forebearance Agreement" is considered by Wells Fargo a way of your loan current. I know they promise modification before that last huge chunk is due, but I never saw a modification.This same situation is what what got me where I am now. The first plan I was on was completed, and I was denied a mod because I was no longer behind. Each time I got on a mod the chunk at the end got bigger and bigger. They key wording in the Special Forebearance is you "may be considered" fo a modification.
    If you do the math with your agreement you may see that if all payments even the last are made, you will have also paid interest for each of those months.
    Also keep in mind that with the reduced amounts, you may be setting yourself up to be numerically set up for foreclosure.(more than 45 days late)
    You need to work on HAMP nothing less will work. Make sure all your communication with them specifies HAMP. There are no rules they need to abide by on the "Special Forebearance, but at least with HAMP you have a better chance, need they need to specify WHY you were denied, not the typical "we could'nt come to agreeable terms" etc..
  19. jdthroman

    jdthroman LoanSafe Member

    Can anyone tell me about this new plan? Just read about it on February 4, i know it must be a proposal and maybe not finalized yet, but i read in some of the forums how some of you were able to obtain a principal/forbearance reduction. Like all of you i am also in this Wells Fargo/ASC Epic Saga with still no resolution since April 2009. I did receive a proposal, but payment is still too high, with my net income the only payment i will be able to make will be of that of the mortgage and since they do not want to negotiate payment, i will then need for them to reduce my principal or offer a final balloon payment. Below is the information obtain of the most recent proposal as to principal reduction.

    RPT-Plan to cut mortgage principal pitched to Congress

    Thu Feb 4, 2010 8:00am EST
    (Repeats item initially run on Wednesday)

    Regulatory News | Bonds
    By Al Yoon
    NEW YORK, Feb 4 (Reuters) - A group of influential mortgage investors is intensifying efforts to encourage a new phase to U.S. housing stability plans that would give homeowners ability and incentive to pay their loans.
    Proposals from a coalition led by Fortress Investment Group address the problem of "underwater" loans, whose high balances relative to fallen home values have to many investors become the chief threat to U.S. housing stability.
    Central to plans pitched this week to U.S. House Financial Services Committee Chairman Barney Frank is a controversial way to deal with secondary loans that homeowners piled on during the housing boom. These home equity loans are a major hurdle in modifications, being attached to more than half the mortgages in private mortgage bonds, according to Amherst Securities.
    The Mortgage Investors Coalition -- which represents holders of some $100 billion in mortgage bonds -- instead of demanding full write-downs on second liens are prepared to consider a principal reduction plan where losses are shared, said Micah Green, an attorney representing the group. This softened position on second liens could help break the impasse keeping big bank servicers from forgiving principal, he said.
    "There is a growing sense of concern among policymakers that the lack of homeowner equity is really getting in the way of providing a solution to homeowners," said Green of Washington law firm Patton Boggs LLP.
    The coalition proposal follows U.S. Senate leader Harry Reid's request of Treasury and housing officials for a "more aggressive" principal forgiveness component to the U.S. government's Home Affordable Modification Program, which has been dogged by difficulties in completing modifications and signs that many borrowers are defaulting even after payments were cut.
    The Treasury is considering ideas to address the problem of underwater loans, an official said.
    Principal reduction could be "a natural evolution" for HAMP, which attempts to make mortgages affordable through lower interest rates or forbearance, Green said. Investors want it because they, like homeowners, are in bad loans, he said.
    Under the coalition plan, investors would forgive principal to 96.5 percent of homes' value, clearing a path for borrowers to refinance into a federally backed mortgage.
    The urgency to deal with underwater loans -- estimated at nearly 30 percent of all mortgages -- has been gaining steam amid signs that borrowers are choosing to default even if they can afford the mortgage. Some 10 million loans that are at least 115 percent of the property's value are at risk of such "strategic defaults," the coalition said in a letter to Frank.
    If a principal reduction HAMP were offered, the Treasury could limit moral hazard by limiting eligibility to homeowners already in arrears, the coalition said.
    But investors are still sharply divided over how to modify loans, analysts said.
    At risk is the sanctity of legal contracts, which typically require second-lien investors to take a full loss before firsts are hit. While that understanding is "defendable and correct," it may also be impractical, the coalition said.
    "The objective of creating a serious capability of getting in front of the foreclosure debacle is somewhat idealistic, but we have to turn the idealistic into the pragmatic," said Louis Lucido, a principal at Los Angeles-based investor DoubleLine.
    "What we don't want to do is take contract law and turn it upside down," said Lucido, who supports the coalition's plan.
    BlackRock Inc., the largest institutional bond manager, has floated another idea that cuts second-liens and other debts that are keeping homeowners from paying their mortgages. It wants modifications done by courts, which could be told to reduce a borrower's debt in order of seniority as is done in corporate cases, according to a recent research note.
    Both proposals aim to solve what investors say is a conflict of interest at Bank of America and three other big banks that hold $452 billion in second-liens -- and service and modify first liens. By modifying a first and not the second, the subordinate piece is improved at the first's expense, investors said.
    The banks also hold $231 billion in credit card receivables, which, under BlackRock's plan, would be written-down before the primary mortgage is affected.
    "A solution must be found to write down the second-lien without impairing the capital position of the four largest financial institutions," Laurie Goodman, a strategist at Amherst, said in a report last week.
    Unless mortgage investors are confident in contracts, they may refuse to support housing debt as the government weans itself from the market, BlackRock said.
    Others bemoaned the lack of demand for mortgages at this week's meeting of the American Securitization Forum, whose director called underwater loans the "big gorilla in the room."
    The coalition -- which also includes ICP Capital, HBK Capital Management and Varde Partners -- believes its proposal is needed to entice banks to forgive principal and stabilize mortgages. The Treasury launched a second-lien modification program in April, but only one bank has signed up so far. (Editing by Kenneth Barry) This will really help all of us!!!
    Please inform me if you were able to obtain a principal forbearance and any contact information i can use to help me through this difficult process.
  20. mimirayo

    mimirayo LoanSafe Member

    I hope that all of you on "Special Forebearance Agreements" realize that you are NOT on any kind of HAMP Agreement. If you are looking for HAMP you need to specify. These forebearances are meant to bring your loan current NOT MODIFY.

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