Forebearance Rights?

xzillr8 · #1 10-05-2005, 01:04 PM

What is the name of your state? Texas

My husband was in a catastrophic accident and was fired while he was in the hospital. We have good credit and wanted to keep it that way, so I responsibly called our mortgage company to let them know what happened and see if we could get a forebearance for a couple of months. They approved a 3 month forebearance. At the end of our forebearance, I tried to get them to tack what we owe on the end of our note, but they didn't go for that. Now we are in the midst of paying it back, but it shows on our credit report that we are late on our mortgage.

1) Can they do this even though it was a pre-arranged "non-payment" for 3 months that THEY allowed? That doesn't seem right. 2) Also, once we get completely caught up on what we owe them, do these "late payments" get completely removed off our credit report or will it stay on our history for several years?

BriantheBanker · #2 10-05-2005, 01:14 PM

If your payments exceeded 30 days past due, the mortgage company is reporting accurate information. next time, get something in writting & have it reviewed by a competent real estate attorney.

the sooner you catch your payments up, the better.

good luck,

Brianflorian.com

xzillr8 · #3 10-05-2005, 01:34 PM

Thank you for the reply. We do have our forebearance agreement in writing. It's dated and signed before our "late" payments started.

Samm1970 · #4 10-05-2005, 01:36 PM

Forebearance agreements generally do not include a stop on credit reporting.

So, yes they can do that and unfortunately no, the late payments will not go away once you catch up. Keep good records of the circumstances i.e. police report of accident, hospital bills, letter from doctor, letter of termination from employer etc... You'll need these next time you apply for credit. Most lenders will look past late payments when they're due to circumstances such as yours.

Also, you may want to consult an attorney regarding your husbands potentially wrongful termination.

xzillr8 · #5 10-05-2005, 01:44 PM

That's disconcerting. The homeowners assistance dept. told us that they would "remove" the late payments off our credit report once we pay all the money due. I guess they were misinformed or lying to us. That goes to show that I should get everything in writing.

Some Random Guy · #6 10-05-2005, 02:10 PM

"The homeowners assistance dept. told us that they would "remove" the late payments off our credit report once we pay all the money due"

Did they say this over the phone or in writing. The lender is not required to remove the late payments, since they reflect the fact that you did not actually pay on time. However, if you pay up as agreed, you may find your lender will actually go back and change the previous months history with the credit reporting agency.

xzillr8 · #7 08-10-2006, 01:19 PM

They verbally stated on a couple of occassions that it would be removed from our credit once we got "caught up".

Well, we finally got caught up but they only removed 3 months of late payments during our actual forebearance period. During our repayment period (which was almost 1 year), they did not remove those "late" payments. My husband spoke to a supervisor at the mortgage company and they claim that they can't remove those late payments off our credit history (from that repayment period) because of HUD requirements.

Now our credit history shows we were late on our payments for almost a year. Are we up a creek without a paddle on this one?

Forebearance Rights?

Accurate info