Mortgage Forbearance Request; how to?

[Mitomito]

I had a large tax bill and signed up for aggressive installment payments.  Then I was struck with a massive vet bill and unfortunately now have paid about $6k in funeral expenses.   I now calculate negative monthly cash flow for three months and my savings is tapped out.  I have 35% LTV so can get home equity out but it’s complicated by a few things and I expected minimum of 8 weeks to get a lump sum to correct problems.   I also have kids to support and car repair looming.  I would like to ask lender to defer mortgage payment 60-90 days at which point I could resume payments and make a lump sum catch up payment in February 2023.  Has anyone ever request payment deferral? Forbearance? It’s an FHA loan but I’m below 78% LTV and PMI is gone now. 

[MarvBear]

Welcome to Creditboards!

We hope that you find what you're looking for here.

Some helpful tips:

• Your post may not get a reply right away. Don't be discouraged, this is a very busy board. If it falls off of the first page, feel free to reply to your post yourself, with the word *bump* in the text. This will *bump* your post back up to the top of the board.
• If you haven't yet, take a peek at out Newbies Section. Everything that you need to know is in that forum, for the most part. It's a lot of reading, we know, but this credit stuff can have a steep learning curve. In no time, you'll be posting like the pros!
• If you find that someone is discourteous to you, use the REPORT button at the top right of every post - that will ensure that a moderator or admin looks at the post and decides if it is against the TOS.
• Off -topic posts should go in the General Forum.

 

Again, welcome to the CreditBoards family!

 CB Admin:  Pam, MarvBear, radi8, LKH & 😇breeze😇

 

[hegemony]

23 hours ago, Mitomito said:

I had a large tax bill and signed up for aggressive installment payments.  Then I was struck with a massive vet bill and unfortunately now have paid about $6k in funeral expenses.   I now calculate negative monthly cash flow for three months and my savings is tapped out.  I have 35% LTV so can get home equity out but it’s complicated by a few things and I expected minimum of 8 weeks to get a lump sum to correct problems.   I also have kids to support and car repair looming.  I would like to ask lender to defer mortgage payment 60-90 days at which point I could resume payments and make a lump sum catch up payment in February 2023.  Has anyone ever request payment deferral? Forbearance? It’s an FHA loan but I’m below 78% LTV and PMI is gone now. 

 

 

that is a hard way to go just to deal with a short-term cashflow issue. Can you use credit cards to get you through? Have you looked at the budgeting tools in the finance sub-forum?

[Mitomito]

On 7/3/2022 at 10:46 AM, hegemony said:

 

 

that is a hard way to go just to deal with a short-term cashflow issue. Can you use credit cards to get you through? Have you looked at the budgeting tools in the finance sub-forum?

Unfortunately I just got a new roof, and remodeled my kitchen and bathroom using my credit cards as I did not want to draw on equity at this point. After I paid for all the work I was going to pay cards off with my annual bonus (February) or get an equity loan (no rush because my cash flow was fine and I had a cash cushion). The vet bills were a huge surprise for a young pet and funeral and associated costs not anticipated at all; due to probate I’ll not get reimbursed for minimum 5 months.  My mortgage is 3k a month so short term I have a monthly deficit and I’d rather not let things just go unpaid. My 401k won’t let me borrow this year as I have a loan outstanding.   I should have taken out the equity instead but now I’m in a short term jam.  

[liverichly]

FYI, since it wasn't COVID-related, then entering into a forbearance agreement may result in late payments being reported.  Your mortgage lender can look into the process at your request, but typically they are approved for situations where there is a reduction in income rather than an increase in monthly debt payments.  You might have better luck asking for the vet to defer payments or reduce them to a level that can be comfortably paid over longer than just 3 months.

[Mitomito]

Well this is actually a reduction in income event. I agreed to tax installment payments of $1,800 a month from August 1 to October 1.   I had $10k in cash savings and have about $800k in equity.   The fault was not anticipating emergencies would pop up in quick succession.   After October 1 I’ll have the $1,800 extra income a month back in my cash flow.  And will by then probably also have either some inheritance or an equity line as well. 
 

if a forbearance is just “late payment” maybe I should just let it be late for two months? 

[Mitomito]

5 hours ago, liverichly said:

FYI, since it wasn't COVID-related, then entering into a forbearance agreement may result in late payments being reported.  Your mortgage lender can look into the process at your request, but typically they are approved for situations where there is a reduction in income rather than an increase in monthly debt payments.  You might have better luck asking for the vet to defer payments or reduce them to a level that can be comfortably paid over longer than just 3 months.

I already paid the vet cash. It was emergency room life/death situation.  My cousin died shortly after and I’m his next of kin.  A lot of expenses for funeral, utilities, court documents, legal stuff that I won’t get back until probate hearings move forward on his estate.  I’m a single mother within a very small family. I typically am assisting other relatives with loans, so there is no one else to help out. 

[hegemony]

You have outstanding loans to friends/family? Time to call them in. You have expenses you can slash, time to slash. Why did you and not the estate pay off utilities, etc? Is the estate in probate and if so when will it end.

 

 

[liverichly]

19 hours ago, Mitomito said:

Well this is actually a reduction in income event. I agreed to tax installment payments of $1,800 a month from August 1 to October 1.   I had $10k in cash savings and have about $800k in equity.   The fault was not anticipating emergencies would pop up in quick succession.   After October 1 I’ll have the $1,800 extra income a month back in my cash flow.  And will by then probably also have either some inheritance or an equity line as well. 
 

if a forbearance is just “late payment” maybe I should just let it be late for two months? 

 

If there is a reduction of income that you can document then that should help you do forbearance/deferment with your lender.  I am not sure of FHA's exact guidelines but it's worth reaching out to your mortgage company to ask about how to get the review process started.  

 

As far as going late for 2 months, you also need to completely catch up your payments before it'll start reporting on time.  So if you don't make the payments for 2 months, and then in month 3 you are able to make all 3 monthly payments, then you'll only be 60 days & 30 days late for months 1 & 2 you missed... but if you aren't able to make all 3 month's payments in month 3 then you'll continue to have late payments reporting until you are current.  Some things are more important than having a good credit score though, so just have to weigh out your options if the forbearance isn't successful.

[Mitomito]

On 7/5/2022 at 1:32 PM, liverichly said:

 

If there is a reduction of income that you can document then that should help you do forbearance/deferment with your lender.  I am not sure of FHA's exact guidelines but it's worth reaching out to your mortgage company to ask about how to get the review process started.  

 

As far as going late for 2 months, you also need to completely catch up your payments before it'll start reporting on time.  So if you don't make the payments for 2 months, and then in month 3 you are able to make all 3 monthly payments, then you'll only be 60 days & 30 days late for months 1 & 2 you missed... but if you aren't able to make all 3 month's payments in month 3 then you'll continue to have late payments reporting until you are current.  Some things are more important than having a good credit score though, so just have to weigh out your options if the forbearance isn't successful.

Thank you. My score will be toast but I guess I’d rather just have late mortgage payments than late payments on 4 credit cards.  Never in my life have I had emergencies in the $3-5k range occur several months in a row. My equity loan will now have a crappy rate but hopefully I can refinance it down over a two year timeframe. I’ll payoff all my credit cards and catch up my mortgage with equity. As I said I owe $400m on a house worth $1mm to $1.2mm.  Just a single mom miscalculation of adequate cash cushion.  My cousins funeral costs keep coming and probate refund to me likely 6months to a year out.

[Mitomito]

On 7/5/2022 at 8:32 AM, hegemony said:

You have outstanding loans to friends/family? Time to call them in. You have expenses you can slash, time to slash. Why did you and not the estate pay off utilities, etc? Is the estate in probate and if so when will it end.

 

 

Probate is just getting started.  So 6-12 months for refunds on estate costs.  The estate is large but not liquid.  Art, property etc. 

[Mitomito]

On 7/5/2022 at 8:32 AM, hegemony said:

You have outstanding loans to friends/family? Time to call them in. You have expenses you can slash, time to slash. Why did you and not the estate pay off utilities, etc? Is the estate in probate and if so when will it end.

 

 

By the way loans to my family don’t get paid back. Struggling siblings with child support etc.