4 month forbearance offered by Wells Fargo

[dcguy]

Hi All -

Yesterday we were offered a 4-month forbearance plan from WF. My current monthly mortgage payment is $4000 and as part of this trial period, we have to pay $3200 for first 3 months (3200x3=$9600) and balloon payment for the 4th month ($6800).

A little background of my journey with WF:
"Applied for loan modification in March '09 and was denied during the second week of June due to high monthly deficit of $1800(this was due to my husbands job loss). Then we were asked to rework on our financials and income.We submitted the package second time in 2nd week of June by bringing down the monthly deficit to $220 (still in negative). And then yesterday we were approved for a 4-month forbearance plan (I have not received any paperwork yet but was just told by the L&M dept)."

Till now I have never been late on any kind of loans including credit card, student, auto, mortgage loans. And definetly dont want it to change now. I was expecting a loan mod but was offered a forbearance instead .

Could you guys please help me out here by answering few my concerns. I am sure many ppl are in exact same situation as mine, so please comment.
(1) Should I accept this offer or not? What if I reject it, I was told that if we reject any workout plan offered by the bank then we are not eligible to apply for any kind of workout plan until 12-24 months .. is that true?
(2) I work for federal agency, will this forebearance plan affect my credit history i.e. is this reported to credit bureaus?
(3) Doest WF do forbearance before actually doing the permanent mod? What are the chances of making the modified payment as our permanent payment?
(4) I have been in contact with presendential executive member. Can she do something at this point?

Thanks.

[Moe Bedard]

Hello and thanks for joining the community!

Let me see if I can guide you here.

Could you guys please help me out here by answering few my concerns. I am sure many ppl are in exact same situation as mine, so please comment.
(1) Should I accept this offer or not? What if I reject it, I was told that if we reject any workout plan offered by the bank then we are not eligible to apply for any kind of workout plan until 12-24 months .. is that true?

No, that is not true. Depending on the investor, this may be an internal policy but it is based on a fully executed loan modification and not just on an offer. If you cant afford it, don't take it and demand a new rework on your financials.

(2) I work for federal agency, will this forbearance plan affect my credit history i.e. is this reported to credit bureaus?

Yes, it acts almost like a foreclosure, just not as bad.

(3) Doest WF do forbearance before actually doing the permanent mod? What are the chances of making the modified payment as our permanent payment?

It depends on the case and investor. They may feel that you will not make it and a forbearance make it easier fro them to foreclose if you do not make the payments on time. They can literally pick up where they left off if you fail to make payments and foreclose quickly on you. A straight loan mod, would make them start the process over again.

(4) I have been in contact with presidential executive member. Can she do something at this point?

YES, YES, AND YES, these are the best professionals to deal with and I bet you can make your case with her as opposed to the normal channels

[2miles]

Hello,

I also have a similar forbearance offer from WF. I would like to contact a presential executive member for assistance. Do you have a phone number or email address that you can share with me?

Thank you

[dcguy]

Thanks Moe for your valuable input.

I definetly can afford the payments but my only concern is the credit reporting .... both my husband (not currently working though) and I work for federal agencies and on the path of getting security clearance's. This will really hurt us .... I will talk to the ER team member to help me out here. Hopefully she would .

2miles, here is the presidential executive member contact: 1-866-671-0813

[upside down in socal]

I was in a similar situation where I could not chance my credit score declining, so I have managed to pay my full amount (for the first 2 months so far) during the forbearance/trial period so that I would not be reported as late. It's tough, but I have no other option. If you can struggle through for the next 3 months maybe that is an option for you.

Good Luck!

[dcguy]

hi upside_down_in_socal -

you said that you managed to pay full amount. Is that amount your regular monthly payment before they offered forbearance?

Or doest it mean that if you pay the mentioned amounts in the forbearance plan then it wont be reported to credit bureau. Could you please share you thoughts.

thanks.

[upside down in socal]

I was not behind with my mortgage and didn't want to be just to get a modification. I was able to shoe sufficient hardship that I qualified under my lenders profile. My lender did require the forbearance period because they typically only modify for people who are behind so this is how their system is set up.

I am paying my regular full mortgage payment prior to the modification trial. By paying the forbearance you will not be fulfilling your obligation to pay the full original contract amount under your loan therefore you will be reported as late. They will put the money you pay into a holding account and when you pay enough to cover your regular payment it is recorded as a full payment made. Usually this takes 1 1/2- 2 forbearance payments to meet 1 original payment, so every other month you are 30 days late. This is how my mortgage servicing company does things as explained to me by my modification plan administrator.

I would call the executive office to see if you are in line for a possible modification and then explain the situation to them. They should be able to do the same for you if you can manage to scrape together the full payment during the forbearance period.

[dcguy]

hi udis-

thanks for sharing your thoughts and experience.
This is what I understood from your last posting.
"Eventhough bank approved us for forbearance plan (in our case, forbearance payment is around 800$ less than the current regular monthly payment), if we somehow manage to pay the full amount (current payment prior to forbearance) then it wont be reported to credit bureaus. Did I get that right? But we still need to talk to the bank if we would be eligible/in-line for a loan mod eventhough we pay the regular monthly payment in forbearance period. In our case, we could definetly pay the full amount since the forbearance amount is just 800$ less."

We have called my executive team specialist 2 times but didn't get a call back from her. Will call her this afternoon.

Thanks.

[dcguy]

2miles - sorry .. I just realised that I gave you the presendential exective teams fax number instead of phone number ... Here is the phone number: 1-800-853-8516.

thanks.

[upside down in socal]

Let them know you are accepting the offer, but cannot have negative credit reporting so you will find a way to pay full mortgage payment during the forbearance period. Paying the regular amount during the forbearance should have no effect on their decision to give you a mod. If you have shown an accepted hardship and yo follow through with their requirements, then it should be a done deal. They should be understanding. Maybe I misunderstood you originally, but I thought you were concerned that you were only given a forbearance, and not the trial period for a modification. That is why I recommended you contact the bank to verify if this was the trail for the modification or if they were only offering a temporary fix with a forbearance. My mortgage is not covered by Obama's plan. My investor requires a forbearance but it acts as the trial period and then the mod is finalized after the 3 months of "good faith" payments.

I just received notification this morning from my credit monitoring service that the mortgage company reported me 30 days late as of June30. I called them promptly. I am to fax over a copy of the credit report update and they will remove the notation ASAP. You will need to watch them like a hawk, but you can get through the process with no negative aftereffects! During the process I've gone online each month and printed out a copy of my mortgage transaction history and a copy of the cashed check from the banks website and keep it handy just for instances like this. Document everything so you can dispute when needed. These banks have so many different departments and each operates independent of the others. Its our responsibility to make sure they do things correctly (we have all learned the hard way that they won't police themselves!)

Good luck to you. Our situation is not the norm, so they are not quite sure how to handle it. We are all learning together. Keep us posted how things go.

[dcguy]

udis - thanks for the detailed explaination .

I spoke to one of the executive member team and asked if accepting the FB plan would affect by credit report and she said that they have a note on their system saying that "it is coded and wont be reported to credit bureaus". If thats the case then I would definelty go ahead and accept it. The worst thing that could happen at the end of the FB plan would be no loan mod .

will keep you posted.

thanks.

[dcguy]

udis - an update from my side, I called the L&M dept to give me the exact numbers for my forbearance plan and when I compared my regular monthly mortgage for the next 4 months against the forebearance period looks like I would be paying around 400-500$ more with the forbearance plan. I asked the L&M representative and they said that its some late fees . She also said that even if I pay the regular full amount during the forbearance period, the late fees will be there and I need to pay that.
Did this happen to you too? Are you paying some sort of fees during this forbearance period? Not exactly sure what kind of help these guys are providing by asking 400-500$ more .

Thanks.

[upside down in socal]

Mine offered me to skip the month of June with the forbearance to July, Aug, Sept. and I believe this would have resulted in late fees. I went ahead and paid June, July and my 3rd payment will be Aug. I spoke to them and made sure they documented the reason I was deviating from the signed plan (to avoid 30 day late dings) and my company had no problems with this. As I said earlier they did report me, but have agreed to correct the report. I will have to watch closely and verify everything is corrected.

Did they offer you a skip? That may be where the fees came in. If you're not late, there should be no fees. If you have been late, can they roll that into the balloon at the end? If the mod is approved, then the balloon is not an issue as it is usually tacked onto the back of the loan.

[dcguy]

Our bank didn't offer the skip payment.
My current monthly payment is 3931$ but as part of 4 month FB plan, they are offering 3110$ for Aug,Sept and Oct. And for Nov we need to pay a balloon payment of 6685$. When I talked to exec team they said that they should not be putting any late fees but when talked to L&M, they said that we need to pay late fees. Not sure who is correct?
Anyways, till now I havent received the FB package in the mail yet. we might have some surprises there . will see that and keep you posted.

Thanks.

[dcguy]

I have contacted WF L&M team and executive team regarding the 4 month forbearance plan they offered us. Since these two teams are different I asked the same question and got different answers.
My question to them was if we accept the "4-month FB" plan, would we reported to credit bureaus?
- L&M rep said "YES" but as a "Deferred Payment" which wont hurt the credit that much.
- Exec rep (after looking at our documents on their system) said that it wont be reported.

Not sure which one to believe? Since atleast one of them said that it wont be reported, I am planning to monitor by credit and if I see any discrepancy or weird updates then I can talk to them. Any other suggestions?

Thanks.

[upside down in socal]

You could try to see if your contact in the exec office will send you an email stating what you were told over the phone. That way you can easily dispute if they do report you.

[Al_2009]

Last year when WF did my first modification they did not take payments from me for apx. 5 months; they rolled the monthly payments into the principal. During this period they reported nothing to the credit agencies; no delinquency, but no payment either. The report just says 'no data'. I asked WF about this and they said that the alternative would be to report me as up to 5 months late, so you can guess which alternative I took.

[dcguy]

Al_2009 -

Were you offered a forbearance plan or a direct loan mod? If you were offered FB first and then loan mod? how did it go?

thanks.

[dcguy]

Hey guys -

I am still waiting for the forbearance pkg from WF. They say that it has been sent out on July 9th and today is July 21st. And my first forbearance payment is on Aug 1st (thats around the corner). Does it really take this long? Did anyone come across with similar situation? I would really need to look at those papers before signing and agreeing to their terms.

I am looking at another option: REFINANCING. Out LTV ratio is around 115%-117%. According to new HUDA announcement, we could refinance if LTV is upto 125%. How far is that true? Did anyone talk to their lenders regarding this yet? When I talked to WF, they said that they are still working on it. Ours is not Fannie/Freddie loan, Are we still eligible? Please put your 2 cents on this.

Thanks.

[dcguy]

Hey Guys -

Finally I got the package from WF regarding the special forbearance plan they offered us. Initially we were happy when WF offered this plan over the phone but after going through the agreement (and some intimidating words atleast it feels like it) we are little scared whether we really should accept this plan or not.

We are still current on our mortgage and have the ability to pay for next couple of months. Following are the concerns we have, if someone could put their thoughts on these, that would be helpful for us in deciding whether to take it or not:
(1) We have been told that Special Forbearance (SF) would be reported to Credit Bureau's as "Deffered payment" which wont hurt the credit score that much. But I got contradictory response regarding this from WF L&M customer reps. Some said it will be reported and some said it wont be reported till the end of SF plan. Not sure what to believe. But we will take the worst case i.e. it being reported and not affecting our credit score that much.
(2) According to me, after the end of SF plan they will ask for our updated financials and then decide whether we really eligible for a loan mod. If our financials change then i believe they wont approve us for mod and these 4 months our credit score will get a dent.
(3) Assuming that we get approved for mod, who sets the loan-mod agreement? does the bank set their own loan-mod agreement or they have to follow the exact terms dictated by the government? By the way does anyone know of WF loan mod agreements?
(4) Finally,we are thinking that since we can pay our mortage for next couple of months is it really worth to take the risk and which will affect the credit score and then subsequently not being eligible for loan-mod (if my husband gets a job by that time)?

Please comment. we need to decide this by Monday.

Thanks.

[John12333]

Hi, so any lattest status? I'm in similar situation with Bank of America, and they told me they'll give me 3 months of forbearance before considering modification. I don't know if I should pay in full during the 3 months or not. Thanks.

[Al_2009]

Originally Posted by dcguy

Al_2009 -

Were you offered a forbearance plan or a direct loan mod? If you were offered FB first and then loan mod? how did it go?

thanks.

I was offered a direct loan modification. They rolled the 5 months payments into my principal, so while my rate is a lot lower, I'm still behind the 8-ball.

They're working on another mod for me, since I got slammed with a big escrow increase. WF has thousands of new people working on loss mitigation (hired in the first few months of the year), so they're generally in tough shape in terms of getting these done in a timely manner. I submitted my paperwork at the end of March; they promised 60 - 90 day resolution, and I'm still in a holding pattern 130 days out, with no clear completion date...

[dcguy]

John12333 -

No updates as of yet ... we have accepted the special forbearance plan and paid our first payment on Aug 1st. I will call them after our second payment on Sept 1st. Hopefully it works out.

Al_2009 -
Hopefully the new mod works out for you. good luck.

Thanks.

[mojamz]

Originally Posted by dcguy

hi upside_down_in_socal -

you said that you managed to pay full amount. Is that amount your regular monthly payment before they offered forbearance?

Or doest it mean that if you pay the mentioned amounts in the forbearance plan then it wont be reported to credit bureau. Could you please share you thoughts.

thanks.

Credit Bureau Reporting
In accordance with the Servicing Guide, Part VII, Section 107: Notifying Credit Repositories, the servicer should continue to report a "full-file" status report to the four major credit repositories for each loan under the HAMP in accordance with the Fair Credit Reporting Act and credit bureau requirements as provided by the Consumer Data Industry Association (the "CDIA") on the basis of the following:

For borrowers who are current when they enter the trial period, the servicer should report the borrower current but on a modified payment if the borrower makes timely payments by the 30th day of each trial period month at the modified amount during the trial period, as well as report the modification when completed.
 For borrowers who are delinquent when they enter the trial period, the servicer should continue to 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.
More detailed information on these reporting standards will be published by the CDIA.

This information came directly from Fannie Mae website.

[B Stevens]

Can you post a link? This looks like a paper that should be included in the packet people send back to the bank accepting terms of modification.