Loan Modification & Forbearance

UpdatedDec 30, 2009

My mortgage modification plan ends in four months. What happens next?

I'm in a forbearance w/home modification not sure what will happen next I've made the reduced payments required credit is poor I don't like the home but have to live somewhere I have 30,000 equity in home but if I sell-- afraid I won't be able to buy another with poor credit (missed mortgage payments when sick) I cannot rent b/c I have dogs should i file chapter 13 if they don't work with me on the forbearance? I am thinking they will put the missed payments (3) on the end of the loan? I can't let them take my home when I have $30,000 equity I have poor credit (only from being late on these house pymts when I was sick) so I don't think I can get the $5000 I need to bring this current what should I do please help. The forbearance payment trials are up in April I have no idea what the mortgage co will do next.

Contact the lender and ask it your questions about the terms of your forbearance plan and your mortgage modification.

Unfortunately, you do not mention in our message if you are employed. Also, you do not mention if you have remained current in your mortgage payments while in the modification trial period. If the answer to both of my questions is "yes," then I think your chances of remaining in the house are very good.

However, one concern I have is that you mentioned twice that your credit is poor. I wonder why this is so, and what you can do about it. If your financial rough patch is behind you, then you can start to rebuild your credit score so that you can qualify for a mortgage on a property that better suits your needs. See FICO Score Calculation to better understand your credit score and the steps you can take to improve it.

I hope this information helps you Find. Learn & Save.

Best,

Bill

bills.com

4 Comments

BBill, Feb, 2010

Impossible for me to comment meaningfully without knowing more. Who is the "they" you are referring to? Your bank? A third party? A law firm? If you are working with your mortgage lender then your risk is much lower than if you are working with a third party. See the FTC document Foreclosure Rescue Scams: Another Potential Stress for Homeowners in Distress to learn more.

MMichelle Perez, Feb, 2010

I am currently in the foreclosure process on my house. I was unemployed for nine months and am now currently working. My salary is not as good and am not receiving as much child support as well. I have requested a loan modification they told me that they would give me a 4 months forbearence making less payments then they would try to work on a modification. I am hearing different things on these forbearences. Is it safe to sign off or are they just looking for a way get money? Currrntly my house is upside down.

BBill, Feb, 2010

Talk to your first mortgage holder about a deed in lieu of foreclosure or a short sale. If you are able to accomplish either you will be able to remove yourself from the property with your credit report intact.

WWing, Feb, 2010

I am a first time home owner, owing 140k on the house, with an 30k equity line of credit loan. I bought the house at 182k now only worth 179k (in Nebraska). I've been pretty good on all the payments until last November of 2009. Didn't pay in the full amount and then couldn't make the December payment. I've tried to schedule a repayment plan with them but only follow through last month and can't play them this month. Now they cancel the repayment plan and I can't pay them this month or next month. Financially I can barely pay for the monthly loan, utilities, credit cards, and commute to work, with about $50.00 left extra (since my brother moved out). I am trying to do a modification but my bank statement is looking really bad right now; and I keep getting letter from my lender telling me I am about to go into foreclosure. Which option is best for me forceclosure, surrender my house, or bankkruptcy. This house is so stressful that I don't want anything to do with it; but I would like to find a way to walk away from it without hurting my credit score. Thank you for your time.