Can they do this or not?

[Anonymous]

We got behind on our mortgage mid 2009 but still managed to make some payments just not during the month they were due. We were then placed in a trail modification for three months toward the end of 2009 and paid as agreed. Granted they had to report us late in 2009 and maybe for first part of 2010. However, in March 2010 we made a lump sum payment plus a regular payment to make our mortgage current and paid on time ever since.

After trying to refinance, we learned we are reported as 120 days late. On our reports, we can see, they show March 2010 as late but on lender pulls they show last reported delinquencies 03/2010=M and 04/2010=M.

So if our payment was due on the 2'nd and we paid the lump sum on the 9'th, are we still late or delinquent? Is their reporting accurate? They claim they can report as such because they report one month in arrears. We are usually allowed 15 days before having to pay a late fee.

[Walt_K]

I'm confused.

At what time period were you reported 120 days late?  What do you think the accurate amount shoud be? 90 days?

I'm not sure your grace period applies when you are behind.  So if you are 90 days late as of February 2, with your next payment due on March 2, on March 2 you are 120 days late.  I think that's how it works anyway.  Another way to look at it is that when you are current, and your bill is due on March 2, you have until March 17 with a fifteen day grace period, but you're still 15 days late on March 17.  They would report it as 30 days late on April 2, not April 17. 

ETA:  I would ask them for a goodwill modification.  Especially if you had a portion ready to pay that would have kept you from going 120 days late but you were waiting to make the lump sum payment.  Explain that you were ready to pay, had spoken to them about making the full payment (assuming you had), didn't understand how it would report and would have made the partial payment earlier if you had known it was necessary to keep it from going 120 days late.  Hopefully, they will work with you.  Otherwise it's a long wait before you can get a mortgage again.  120 days late is viewed as a foreclosure.  I had this happen to me in 2008.  You need three years of on-time payments again before you're eligible for FHA financing.

[Anonymous]

According to credit bureaus.

August & September 2009 = 30 days

October & November 2009 = 60 days

December & January 2010 = 90 days

February & March 2010 = 120 days

Nov. Dec. & Jan were the trial mod months.

Yes, I was thinking no more than 90 days because on March 1, 2010, we made a regular payment and then on like the 10th we made the rest of rear payment. But low and behold we learned that March 1 payment went for another 2009 payment but we were not informed of that as well as the need to pay the rear amount before we did. We kept them informed all the way. We've tried a goodwill letter and they will not budge. They just sent us a letter saying they will not change and they had a right.

They state they could refinance us because they only look at the last 12 months but everyone else states otherwise. They've done us bad once we got behind and I really don't trust the company any longer. Even when you ask questions about the refinance process, they get huffy. So why should I continue with you unless we just have too.

[Walt_K]

I'm trying to figure this out. 

So you were paying some reduced amount in November, December, & January, and that is why it goes from 60 to 90 to 120?  Someone with more experience than me is going to have to help you.  I think I've read on here something to the effect that when you do a trial loan mod, they still report lates according to the original terms of the loan.  So if your payment was reduced, you didn't make a full payment in November which caused you to go 90 days in December.  Your reduced December and January payment was probably enough to cover another payment, but then falls short in February causing it to go 120 days late.  

So it looks something like this.  Assume payment is $1000/month.  As of November, you are 60 days behind, so for December 1, you owe $1000 plus $2000 arrears.  You agree to trial mod of $600/month. 

December 1 pay $600.  Now 90 days late because calculated based on original terms which were $1000/month.  Owe $400 for December and the $2000 already behind, total $2400 behind.

January 1 pay $600.  This is enough to cover your $400 behind for previous month, leaving $200 to go toward Jan 1 payment of $1000.  You remain 90 days and are now $2800 behind.

February 1 pay $600.  This is doesn't cover the $800 behind for previous month and nothing goes toward the $1000 for this month, so it goes 120 days late.  You now owe the  entire $1000 for Feb. and are $3200 behind.

March 1 pay $600.  This would have brought you back to 90 days but you have the $1000 for March, so you remain 120 days late owing $3600 behind.

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I think something like the above is what went on.  But like I said, I'm not sure so hopefully someone will come along and confirm (or better yet tell me I'm full of it and let you know of an easy way to fix it).     

[Anonymous]

Walt_K is doing a stellar job on this.  Pretty impressive - and as out of the loop as I am on this process - his post certainly looks savvy to my eyeballs.

OP - would you like this to be moved to the mortgage forum?  You'll find some mortgage gurus over there who might take a peek at it it we move it there.  Then you might get the confirm or deny that Walt_K is hoping for.

[Anonymous]

Not using exact amounts but listed this just in case you wanted to figure it out like someone else did. They definitely can’t get the 120-day thing. At any rate, you’re so FULL of it and I really wish you would just TELL us an easy way to FIX this crap.  We tried to do goodwill and this is what they sent back saying we have a right.

July 2009 $400 full payment received and applied to June 2009 payment

August 2009 $300 partial applied to holding

August 2009 $100 partial applied to holding

September 2009 $400 hold funds applied to July 2009 payment

September 2009 $200 partial applied to holding

October 2009 $220 partial payment applied to holding – trial mod amount for Nov. 2009

October 2009 $420 hold funds and partial applied to August 2009 payment and fees

November 2009 $150 partial applied to hold

November 2009 $220 partial applied to hold – trial mod amount for Dec 2009

December 2009 $220 partial applied to hold – trial mod amount for Jan 2010

December 2009 $400 hold funds applied to September 2009 payment

March 2010 $400 full payment applied to October 2009 payment

March 2010 over $1800 applied to Nov. & Dec. 2009 and Jan, Feb, March 2010 and fees

March 2010 $400 full payment applied to April 2010

Yes, you can move it to the correct place or where you think there is a better chance of more replies.

[Edited again - missed the joke.  Sorry for the misunderstanding. - Lel]

[BrianB_The_Loan_Professor]

First there is no easy way to fix this - it is a mess - Typically when you fall behind and pay a little at a time covering some previous months payments you get rolling lates - which is what I believe you were thinking should be the case - however I do not know if banks are required to do it this way? 

I believe the advise above was solid - not sure why you would slam them as they tried to show you how it works - tough to get help when you treat people like that - 

[Anonymous]

Brian reread Walt's post. He made a joke in his post - see this line below in his post. And so I made the joke back, but was not attacking. I apologize to everyone who thought I was attacking him!  I thought Walt was making a joke with me so I was making it back only.

Nothing is easy in life. At least I've not found it.

I think something like the above is what went on.  But like I said, I'm not sure so hopefully someone will come along and confirm (or better yet tell me I'm full of it and let you know of an easy way to fix it).     

[BrianB_The_Loan_Professor]

Yeah I missed that part - thanks for clarifying - I didnt connect the dots -

[Anonymous]

No problem Brian. Online is a total different ball game.

I'm still working with mortgage companies but wanted to see if there was anything we could do. My goal was really to remove the 120 if it was proven that it should not be there in the first place so that we could refinance.