Mortgage Loans

[VirtualCuriosity]

Any opinion and advice is greatly appreciated here.

I am trying my best to keep it short, but please understand if I can't.

We were placed on a mortgage Forbearance Agreement with a smaller monthly payment for a nearly a year.  The object was the mortgage co. would then start a modification and the arrearages would be dealt  with within the mod.  Well,  my wife was called back to work about a week or two before the plan ended.  At that time we were not offered a mod. due to the "income being restored".  The mortgage co. then demanded all of the arrearage, immediately, or forelosure.  To avoid that, we agreed to a 24 month "Forbearance Agreement" that SPECIFICALLY states all mortgage monthly payments would be made each month while a specified additional amount (nearly 1k) extra each month would pay off the arrearage. 

So, both plans were called a "Forbearance Agreement".  The first was a discounted mortgage payment to avoid foreclosure.  And, the second was the normal mortgage payment with an additional specified amount to go towards the arrearage.  Well, we have done this faithfully for the past 13 months and will have actually eliminated the arrearage prior to the 24 mos agreed upon. 

So, I check the credit reports and the mortgage co. has reported 120 days late for the past consecutive 24 months.  Now, I understand that we stll owe an arrearage.  No arguing that.  BUT, we tried to and did what was morally right by not walking away.  We followed their terms.  The plan says in writing that each monthly payment would be made as normal, and they would be taking the specified additional amount to pay off the arrearage.  It does not seem right that there would not even be so much as an entry stating that we are at least paying as agreed or something less damning thatn just being 120 days late each month for so long. 

Does anyone have any experience with this type situation?  Anyone have an opinion or advice on whether this can be repaired, if possible?  Or am I just S.O.L.. and be thankful we didn't lose the home and pat ourselves on the back for not walking away like a lot of others are doing?

[RobertEG]

I suggest you first go over to the mortgage loan forum on this site.  That is where the heavy-hitters in mortgage-related matters hang their hat.

You appear to have some serious legal and mortgage-loan issues to first address.

[mickie08]

like it or not, it is reporting correctly.  When you enter a forebearance, it is not an agreement that the loan will be reported as current.    Once the forebearance was started, the loan was no longer in compliance with the original loan agreement and therefore would be reported as such.  I say this as someone who went through a similiar situation so I would love if there was a different answer, but anytime you break from your original agreement then you can be reported in default.    

[GregB]

I realize it is not the result you hoped for but I think you should "be thankful we didn't lose the home and pat ourselves on the back for not walking away like a lot of others are doing". I think you are S.O.L. on the credit problem but far better off doing it the way you did it. I realize you might think it was very bad timing for your wife to get her job back just befor the first agreement period but you might still be waiting for the agreement to be done even now, 13 months later. I know someone who has been at the end of theirs for almost a year, even getting a FedEx package of final paperwork saying that it would be completed withing 30 days - that was now about 100 days ago.

I think your credit was going to be damaged heavily as soon as you couldn't make the payments. This way you still have your house and your credit is probably much better than it would be with a string of lates followed by foreclosure or short sale. 

Congratulations on digging out of the big hole even though it will be a while until it is completely back to normal.

[VirtualCuriosity]

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Thanks for the responses.  Thanks also GregB for the positive reinforcement.  I was within a week of a Sheriff sale date when all this started, so I guess I am thankful.  I was just confused at how it was reporting.  I guess I can make a statement explaining everything and see if it can be attached to the report.  I think I read about that somewhere.

[PhillyGuy215]

I would attach a statement in case you ever do anything that requires a manual CR review.

A simple "Mortgage Forbearance Agreement - Paid Arrearages on X/X/2010.  Mortgage is now current.".   Employers do manual pulls so having that note attached would self-explain the 120-days.

[GregB]

A consumer statement is seen in a manual review and could help for something like employment.

However, I seem to recall that it is best you don't have any consumer statement in general. Can you hold off and collect some more info? I don't know the details on this and it has been quite a while. I do recall that when I was tempted to add a statement, several knowledgeable people stopped me.