removing lates from forbearance plan?

[Julieab]

My lender majorly messed up my request for a 3 month forbearance and now I have a 30 and 60 day late on my report, which the lender said they would update.  I filed an online dispute with the 3 bureaus and one came back today with no change.  Ideas to do next?  Long story below:

 

10/27/20 - requested 3 month forbearance from lender online.

10/28/20 - status update online said "RFA passed," I thought this meant forbearance was approved so I didn't make Nov or Dec payments.

12/10/20 - received letter in mail for collections from lender, called lender and they said my original request was still being reviewed.  They emailed some guy to speed up my request.

12/17 - 1/27 - weekly calls to find out status, they told me not to make any payments or it would be applied to November as a late payment.  They said the only way to remove the lates was for forbearance to be approved for those months.

1/27/21 - forbearance was finally approved, but only for Dec, Jan, and Feb.  I called and told them they approved the wrong 3 months.  Asked them to shift it to Nov, Dec, Jan because I was ready to resume payments.  They said they would email the "some guy" again and ask for Nov to be added.  Still instructed me not to make payments yet.

2/17/21 - forbearance and payment deferral plan was approved for Nov, Dec, Jan, Feb, and Mar.  Email said the account would be brought current on 3/1 and I should resume payments on 4/1.  I emailed to ask if the lates would be corrected on my report and they said yes and that they sent a request to all 3 to correct.

3/5/21 - reports updated current, but the 2 lates remained.  I filed online disputes with all 3 and uploaded support documentation of email and forbearance/deferral plan.  Emailed the lender about the lates again.

3/8/21 - lender emailed they sent my request to the credit reporting dept.

3/17/21 - Experian finished their dispute and didn't remove the lates.

 

 

[centex]

By going to the bureau WHILE the lender was still processing your request, you may well have cemented the issue to the file.  People NEED to exercise patience when a process is winding its way to conclusion.  Murphy tends to kick in when you kick the hornets nest...

[Julieab]

Def wasn't trying to kick anything.  I had thought it'd be an open & shut case with the bureau - was this person in forbearance? Yes, this person was in forbearance. done.  As opposed to depending on the lender to get around updating (correctly) on their own since they've been rather chaotic the last 5 months.  

 

So, no suggestions?  Or were you implying you think there's still a chance the lender might update correctly next month?

[cv91915]

This isn't my specific area of expertise, so these comments are from the perspective of the thought process I would go through if similarly situated.

 

First, do you know what RFA actually is?  https://advocacy.sba.gov/resources/the-regulatory-flexibility-act/  <- I found that, but I'm not sure it's the same thing.

 

I'd first try to figure out if forbearance was required because the mortgage was federally backed (Fannie/Freddie-owned or insured through FHA/VA).  These forbearances were required to be extended (still had hoops to jump through, of course), and some regulatory agency (CFPB?) would have oversight.  

 

https://www.consumerfinance.gov/coronavirus/mortgage-forbearance-during-covid-19-what-know-what-do/ 

 

If my RFA link is correct, your loan may be owned and/or serviced by a smaller entity and may have different regulators.  And probably more importantly, the forbearance offer itself would have been a matter of courtesy, or more likely a risk mitigation measure (but not a requirement).

 

I'm not suggesting a regulatory complaint at this point, but I'd start by figuring out which type of forbearance this is (mandated or optional) and then starting to narrow down my research to what people are experiencing with the same forbearance type.

 

There are some complicating factors here with working multiple angles to resolve the same thing, which sometimes gums up the process and makes it harder to resolve. 

 

Also (and you would have no reason not to believe what you were told), but there was some risk involved with stopping the payments before you had a forbearance agreement in place (which both parties would likely have to sign).

[IndyPoolPlayer]

11 hours ago, Julieab said:

Def wasn't trying to kick anything.  I had thought it'd be an open & shut case with the bureau - was this person in forbearance? Yes, this person was in forbearance. done.  As opposed to depending on the lender to get around updating (correctly) on their own since they've been rather chaotic the last 5 months.  

 

So, no suggestions?  Or were you implying you think there's still a chance the lender might update correctly next month?

You do realize that a filed dispute with a CRA simply means the CRA has the lender verify the information. Since the credit reporting department of your lender wasn't notified of the forebearance until AFTER you filed the CRA dispute, it came back as verified. All lenders whether its mortgage companies, credit cards, etc can take 30-60 days to report to the CRAs.

[IndyPoolPlayer]

15 hours ago, Julieab said:

My lender majorly messed up my request for a 3 month forbearance and now I have a 30 and 60 day late on my report, which the lender said they would update.  I filed an online dispute with the 3 bureaus and one came back today with no change.  Ideas to do next?  Long story below:

 

10/27/20 - requested 3 month forbearance from lender online.

10/28/20 - status update online said "RFA passed," I thought this meant forbearance was approved so I didn't make Nov or Dec payments.

 

For those who will find this post later, here's the first error - expecting a significant change such as a mortgage forebearance in ONE DAY. The only thing I've seen mortgage companies do in one day is accept payments. A forebearance requires multiple layers of the onion and not waiting for the official notification that you may skip payments has come back to haunt you.

[Julieab]

On 3/17/2021 at 11:33 AM, cv91915 said:

Also (and you would have no reason not to believe what you were told), but there was some risk involved with stopping the payments before you had a forbearance agreement in place (which both parties would likely have to sign).

 

On 3/17/2021 at 6:51 PM, IndyPoolPlayer said:

 

For those who will find this post later, here's the first error - expecting a significant change such as a mortgage forebearance in ONE DAY. The only thing I've seen mortgage companies do in one day is accept payments. A forebearance requires multiple layers of the onion and not waiting for the official notification that you may skip payments has come back to haunt you.

 

To clear up assumptions here...  I actually applied for forbearance for this loan in May 2020 and was instantly approved for 3 months.  They mailed us a contract to sign, but we didn't sign it.  At the time, the only deferral was to make a one-time lump payment at the end of the 3 months, which wasn't helpful.  So we pulled from savings and continued to make payments, but they put the forbearance comment on my report anyway.  By October, we def needed forbearance and I heard the program changed to put the payments at the end of your loan instead.  I figured we only needed 3 months to get us in a good place again, so I applied again, assuming the process would be the same.  "RFA" apparently stands for "request for assistance" according to the servicer.  The loan is federally backed.

[hdporter]

On 3/28/2021 at 1:13 PM, Julieab said:

 

To clear up assumptions here...  I actually applied for forbearance for this loan in May 2020 and was instantly approved for 3 months.  They mailed us a contract to sign, but we didn't sign it.  At the time, the only deferral was to make a one-time lump payment at the end of the 3 months, which wasn't helpful.  So we pulled from savings and continued to make payments, but they put the forbearance comment on my report anyway.  By October, we def needed forbearance and I heard the program changed to put the payments at the end of your loan instead.  I figured we only needed 3 months to get us in a good place again, so I applied again, assuming the process would be the same.  "RFA" apparently stands for "request for assistance" according to the servicer.  The loan is federally backed.

 

Yep ... maybe some assumptions expressed in reply were off.  But, on the whole, this should reinforce the key takeaway from this experience:  Assumptions can really screw you.

 

I understand your rationale for every action you detail.  But I trust you recognize that discontinuing your payments because of an online "RFA passed" notation was a critical fail ... at least without confirming your forbearance status over the phone or by mail first.

 

In reference to your original post, if the CRA's haven't cleared the delinquencies yet, contact your mortgage holder and ask that they send you a letter confirming that they have contacted the credit bureaus and ask that the letter specifically state the correct reporting status for the months in question.

 

If the report hasn't updated within 30 days of the mortgage holder's response to you, enter a new dispute, attaching this letter as backup documentation.  Ideally, that should resolve the issue (and, if not, having provided solid documentation to the CRA's from which to investigate, I suggest that you have cause to bring action against the CRA's and possibly your lender ... but I very much doubt this will be the case).

Edited April 6, 2021 by hdporter

[tiggerlgh]

What type of forbearance did you apply for? The CARES act forbearance required no approvals like other programs.

[nyquil556]

It sounds like you were approved for a "CARES Act" forbearance. If it was a "CARES Act" forbearance, I would write a letter to them stating that you were approved for this type of forbearance and that "lates" are NOT supposed to be reported to your credit. 

 

I have had several servicers screw this up. The "CARES Act" was and is a very different animal for the servicers. I've personally never seen anything like it and I'm the "fix it" guy for a law firm (I help turnaround companies). Good luck.