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Stimulus Plan and forebearance credit reporting

Mland-EC
Established Member

Re: Stimulus Plan and forebearance credit reporting

They  just don't report the payment on time nor late, but they do report that the loan every month is ever so slightly growing. SO even though the gov stopped the negs from non payment for people in a forbeearnce they forgot that the FICO algorithm takes into acocunt the intial loan amout verse what's owed and that DOES and has Effected his credit  by a couple points each month.

SO this is what happens on May 1. Even though he is approved to have until August to catch up they will report him 6 monthd behind. He already made the last two months payment on time, he just can't double up. By August we can get him 100% caught up. We wrongly assumed if we had him caught up by the end of the forbeance that it would not effect his credit. Nope, even if someoen gets a forebearnce today they won't get the grace periodon because the credit reporting grace peroid, that deal ends May1 even if the forbarence starts April 30th. (Mod cut - not here, please.  The 5 Things We Don't Talk About).


IF anyone finds out of the May 1 date is extended let me know, that is actually the point of my post. I am still trying to find that out.

 

Message 11 of 25
Mland-EC
Established Member

Re: Stimulus Plan and forebearance credit reporting

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.

WRONG,  yes he can keep his home and we can do that, but his credit will show him 6 monthd late forever unless he actully caught up. So it is not so simple to just add it to the end, heck that would be so easy and  exactly what we wanted!

According to his lender ONLY A refi with new terms will save his credit or payaing off the 6 months he skipped. Adding 6 months to the end will not save his credit.We are still negotiating and trying to get them to see exaclty what you are saying, but right now they are not reading the law like that, as far as reporting the credit anyhow.

Message 12 of 25
OmarR
Established Contributor

Re: Stimulus Plan and forebearance credit reporting

OP,

 

I also thought it was as easy as just tacking it on to the back end. At least, that's how everyone was making it sound. I wish you and your father good luck. 

 

Please keep us updated as you discover new information. 

    EQ=850        TU=837         EX=837      INQ=0/0/0     UTIL=$1        AZEO


Message 13 of 25
Cowboys4Life
New Contributor

Re: Stimulus Plan and forebearance credit reporting


@Mland-EC wrote:

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.

WRONG,  yes he can keep his home and we can do that, but his credit will show him 6 monthd late forever unless he actully caught up. So it is not so simple to just add it to the end, heck that would be so easy and  exactly what we wanted!

According to his lender ONLY A refi with new terms will save his credit or payaing off the 6 months he skipped. Adding 6 months to the end will not save his credit.We are still negotiating and trying to get them to see exaclty what you are saying, but right now they are not reading the law like that, as far as reporting the credit anyhow.


It isn't wrong. It isn't what is happening for your Dad. I friend of mine and her husband were able to do exactly that.  Whether or not a lender WILL do this depends entirely on the specifics of each situation which also includes laws specific to the state where the home is.  It does not mean that this is the only option to salvage the situation for consumers.  I get it that this scenario is exactly what you want but that doesn't mean the creditor agrees and is willing or able under state law to do that.  

Message 14 of 25
KatSoDak
Regular Contributor

Re: Stimulus Plan and forebearance credit reporting

I did a word search. Forbearance only comes up once, under the Homeowner Assistance Fund.  Section B: financial assistance to allow a homeowner to reinstate a mortgage or to pay other housing related costs related to a period of forbearance, delinquency or default.

 

That's it.

 

But CNBC had an article that indicates (Mod cut) the federally backed lenders to allow 15 months of forbearance.  



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Message 15 of 25
Cowboys4Life
New Contributor

Re: Stimulus Plan and forebearance credit reporting


@OmarR wrote:

OP,

 

I also thought it was as easy as just tacking it on to the back end. At least, that's how everyone was making it sound. I wish you and your father good luck. 

 

Please keep us updated as you discover new information. 


If ONLY that were true.  That is why they keep stressing that consumers HAVE to work this out with their lender or landlord.  The reality of the situation is if they do not get a new set of terms and get it in writing and this goes to court the consumer IS going to lose in the end if they have not paid.  Consumers have been fortunate in these unprecedented times that they got the reprieve they did but in reality there was no legal basis to provide it for the sheer length of time it has been pushed to.  The majority of the furor over all of this is emotional not legal but when it comes to court emotion won't be factored in.

Message 16 of 25
Cowboys4Life
New Contributor

Re: Stimulus Plan and forebearance credit reporting


@KatSoDak wrote:

I did a word search. Forbearance only comes up once, under the Homeowner Assistance Fund.  Section B: financial assistance to allow a homeowner to reinstate a mortgage or to pay other housing related costs related to a period of forbearance, delinquency or default.

 

That's it.

 

But CNBC had an article that indicates (Mod cut)  the federally backed lenders to allow 15 months of forbearance.  


My educated guess is that all of the forbearance moratorium orders address pausing the payments but say NOTHING about credit reporting for that period leaving the decision to the lenders in the end.

Message 17 of 25
FinStar
Moderator

Re: Stimulus Plan and forebearance credit reporting

As a reminder to all participants, especially on this particular topic, please refrain from any political discussions and/or references per the myFICO Forums TOS and User Guidelines.  In specific, the 5 Things We Don't Talk About.

A variety of posts have been edited/removed in adherence to such guidelines.  While it is understandable that the topic could trigger or veer off into a political discussion given the nature of the subject, please be sure to abide by the myFICO Forums TOS when commenting.

 

Thank you for your understanding.

 

-FS

Message 18 of 25
Save-n-Invest
Frequent Contributor

Re: Stimulus Plan and forebearance credit reporting


@Mland-EC wrote:

It is riduculous here, he is 76 and no vaccination.

Thanks for the concerns and comment!

 


That's outrageous. Do you know if that is due to inadequate vacine supply or the regs of your area?

 

I'm so sorry. 

Message 19 of 25
incognitony
Regular Contributor

Re: Stimulus Plan and forebearance credit reporting

Our FHA loan was current as of last April so I'm not sure if being late at the onset is what is causing all the grief with the lender. My understanding is that it will be put into a 0% partial claim at the end of the loan or if we sell or refinance (don't see either happening). Does he not qualify for a loan modification? That doesn't require a credit check but just being able to afford the new payments. There are limits on the value of the home so that could play into it as well. The lender should know the options but it seems like they are rather sucky for him.

Message 20 of 25
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