https://www.experian.com/blogs/ask-experian/how-the-cares-act-affects-credit-reports-and-scores/
My take on it is the loan should continue to be marked "current" if he was not in arrears when he obtained the forbearance/deferment
The wife and I have been blessed in that fact that we have not had any financial difficulties in 2020, so I am a little ignorant when it comes this subject.
For the hundreds of thousands of people that took a mortgage forbearance, are they ALL facing being marked as XXX days lates on their credit reports?!?
@OmarR wrote:The wife and I have been blessed in that fact that we have not had any financial difficulties in 2020, so I am a little ignorant when it comes this subject.
For the hundreds of thousands of people that took a mortgage forbearance, are they ALL facing being marked as XXX days lates on their credit reports?!?
I too am fortunate to have come through this better off. DO NOT quote me on this but my understanding is that mortgage payments can be deferred or in forbearance until May 1. That meant during this time they would not be marked as late or subject to foreclosure. HOWEVER, that did not also mean an automatic pass on the payments. The consumer had to work out a payment plan that COULD include simply deferring them to the end of the mortgage and delaying the payoff date by the number of months deferred. Those consumers who cannot work out a financial solution with their mortgage lender and cannot bring the payments current would then be subject to the credit reporting for that period showing the payments as late and yes, could be subject to foreclosure.
@Mland-EC wrote:Thats the old one and it lapses May 1. You are right but only if he becomes current somehow.
Funniest thing is when they ran the numbers using what he made before he had to go on SS they were coming up with a plan that tacked on the 14k he is behind to the prcinciple and the monthly payment is near 300 MORE a month! It is outragous, that is not assitence for someon that never made a late payment as far as I can see on his credit report for anything, ever.
Yes, restructuring the arrears means the payment will go up. Unfortunately there isn't much of a way around this once you get in to 6 months or more in missing payments.
Not to be the Debbie Downer but it isn't outrageous. (Mod cut - not here, please. The 5 Things We Don't Talk About). His never having made late payment is great but has little reflection on his ability to pay the outstanding obligation with the material change in his income and earning potential. "Assistance" is a subjective terms and it isn't uncommon for the "assistance" a consumer NEEDS or wants to be something the creditor simply cannot do. That doesn't mean that it is outrageous but there is only so far they can go. It isn't personal. It is business. It sucks that some people are indeed going to lose their homes (Mod cut - see above).
If selling the home and paying off the arrears would allow him to rent something now and preserve his credit you might seriously look in to that. Homes are selling at a phenomenal pace. This could possible be done in less than a month.
@Cowboys4Life wrote:
@OmarR wrote:The wife and I have been blessed in that fact that we have not had any financial difficulties in 2020, so I am a little ignorant when it comes this subject.
For the hundreds of thousands of people that took a mortgage forbearance, are they ALL facing being marked as XXX days lates on their credit reports?!?
I too am fortunate to have come through this better off. DO NOT quote me on this but my understanding is that mortgage payments can be deferred or in forbearance until May 1. That meant during this time they would not be marked as late or subject to foreclosure. HOWEVER, that did not also mean an automatic pass on the payments. The consumer had to work out a payment plan that COULD include simply deferring them to the end of the mortgage and delaying the payoff date by the number of months deferred. Those consumers who cannot work out a financial solution with their mortgage lender and cannot bring the payments current would then be subject to the credit reporting for that period showing the payments as late and yes, could be subject to foreclosure.
I guess I just assumed that everyone got a 6 month pass/pause, with normal payments resuming at the end of that 6 month period. And, of course, you extended your mortgage by 6 months on the backend. Maybe some small fee tacked on.
If there are situations where the paused payments are all due at the end of the 6 months, I think there are going to be a lot of people that are going to be in trouble.
Has the lender been reporting the account as current during the time he was in forbearance? If so, how can they then report a late payment the month his payments resume? Seems like they would be using the codes set up by the CRAs to indicate disaster. Did they defer the payments or not?