OPTION #2   “THE FORBEARANCE AGREEMENT”

WHAT IS A FORBEARANCE AGREEMENT?

If the Loan Modification doesn’t work because you don’t have the $13,000 in funds they are asking for, then The Forbearance Agreement may be better for you. The Forbearance is a workout agreement with the bank.

Example:

          10 Payments behind

          $1,500 per Payment

          $2,500 Attorney Fees

$17,500 Total Due to Bank without late Payment Fees or Insurance

              fees, if any.

Here is How a Forbearance works.  

The bank will always ask for attorney fees and then approximately 40%-50% of the back payments. 

So let’s look at this Example.

          $2,500 Attorney Fees

          $6,000 4 of the 10 Payments

$8,500 Total Due

You need $8,500 to enter into the Forbearance agreement.

The Balance of the 6 payments will be processed accordingly.

You have to qualify for this. Everyone qualifies, it’s just some will pay over 12 months, some over 6 months.

          Example:

                   $8,500 Down

                   6 Payments. Balance owd 6 x 1500 = $9,000

This $9,000 depending upon your Monthly Income will be added to your monthly payment as follows.

          Example:

                   $1,500 is your Monthly Payments you Qualify for a 9 month program which means your new Payment will look like this:

                   $1,500 Old Payment

                   $1,000 x 9 for past monthly payments

                   $2,500 per month for the next 9 months

Then at the end of the 9 month period, your payments will go back to $1,500 per month.

Remember these 2 Important Points

1.) 85% of Homeowners fall out of the Forbearance agreement in the 1^st 2-3 months, because of the failure to pay.

2.) Just because you have worked out a deal with the bank, you are not out of foreclosure. You are still in Foreclosure till your 9^th payment of $2,500 is made. Then and only then, will you get a foreclosure withdraw letter from the bank, stating your loan is current.

The bank will keep passing the foreclosure date every month.

Let’s look at how this is done:

Let’s say today is March 26^th and you make a deal with the Bank on this day. They will have you wire a transfer or Western Union your money to a special account. Do not just mail your check in, the bank will tell you where to Fed-ex a cashier check if they want you to. They will not take personal or business checks at this time. The bank will require certified funds.

Let’s say today is March 26^th. You need to send your $8,500 payment to the bank. Then starting on May 1^st, your 1^st of 9 payments of $2,500 will be due.

You will need to send this payment Certified Funds or however the Bank requires 3-4 days before it is due, to make sure they receive it in time. You will be sending it on the 26^th or 27^th of every month. On the day before it is due, you need to call the bank, to verify they received the money in time. This is a must.

This is how your foreclosure will look like on dates.

Let’s say today is March 26^th, you send $8,500. Sale date was April 6^th. After receiving the $8,500, the bank calls the public trustee office (or whoever sells the foreclosures in your area) and sets a new sales date of May 6^th. You make the payment on May 1^st of $2,500. When the bank receives that payment they will call and move the new sale date to June 6^th. You make the June payment then the bank will move the sale date to July 6^th. If you miss the July payment, that was due July 1^st, on the 2^nd of July, you do not have an agreement with the bank. Your forbearance agreement has been voided. Your house will go to sale on July 6^th, and you will get evicted.

Now you are in trouble; however, there is still hope.

Let’s re-think what has happened here. You now only owe the bank $7,000 from the foreclosure, plus your $1,500 for the July payment, which is your basic monthly payment.

You use to owe $17,500 you paid $8,500 down and 2 payments of $1,000. You really paid $2,500 per month; however, $1,500 per month is for your normal May and June payments.

So you have         $17,500

-              $  8,500 Down Payment

-              $  2,000 Payments (May and June)

$  7,000 Due on past payments

                               +      $ 1,500 July Payment

                                      $ 8,500 New Total due to the Bank 

Let’s say today is July 3^rd, you owe $7,000 from the foreclosure and $1,500 from the July 1^st payment, which totals $8,500. This is your new total with the Bank. Now you call the same rep from the Bank and do another forbearance agreement on the $8,500. The bank will want $4,250 down, and the balance of $4,250 will be split evenly over the next 7 months. This now makes your new payment in August $1,500 plus $607.14 foreclosure payment. Your new payment will be $2,107.14 from August 1^st through February 1^st. After Feb. 1^st, if all payments are made on time, this is when you are out of foreclosure and March 1^st is when your old payment of $1,500 will return.

This is truly a great option for homeowners. This is a strict plan and you may need my help to do this.

I charge a small fee for helping homeowners do this.  Please call me so I can help you save your house from sheriff sale. Remember, when dealing with bank, get whatever they tell you in writing, before any money is sent to them.

Call me at 215-778-8140 to help. Let me explain to you how the system works.

                                      Good Luck and God Bless