What to Do if Your Mortgage Forbearance Is Ending

What You Need to Know and Do

If your mortgage loan servicer has granted you a Pandemic mortgage loan forbearance, It's time to take a look at where you stand. What may have been the only silver lining for your finances during the pandemic is coming to an end. The longest mortgage loan forbearance typically lasts 12 months, although they can be extended under specific circumstances for up to 18 months.

If your forbearance has already ended, you can scroll down to the next section in bold, what you need to do if your forbearance has ended.

The first thing to understand is whether your forbearance has truly reaching the end. In thinking this through, you must first decide if you want it to end. Are you able to make your full monthly payment now? If so, it probably makes sense to get back on the horse and start making your payments. They are not going to go away nor get easier to make. If you aren't quite ready, there are options to get an extension for two additional three month periods (not to exceed 18 months)

One thing is clear, everyone must repay the amounts that were deferred during the pandemic. No one is going to be allowed to keep their home without eventually getting caught up.

What You Need to Do if Your Forbearance Has Ended

The good news is that almost all forbearances (except those under private labels, which may or may not be the case) do not require immediate repayment at the end of the forbearance period. You need to know what the options are for catching up.  They could include a short terms repayment plan, a partial claim and second lien mortgage or an agreement deferring payment until the end of your mortgage or until your house is sold or paid off, generally whichever comes first. The deferred payments may or may not carry interest charges, depending on the specific program for which you qualify.  

Did Your Servicer Make Any Mistakes in Your Mortgage Loan Account?

Mortgage servicers make errors that cost borrowers money more than you might imagine. These errors occur as a result of inadequate software systems, mistakes made when services take over or “board” your loan onto their software, and in employee training and supervision. Mistakes made in servicing your loan include in calculating how many payments were deferred, miscalculated interest, principal balance, past due amounts before the forbearance or in payment amount for escrow items such as insurance and taxes.

If you learn that your mortgage loan servicer has made errors on your loan account, you should take prompt action to avoid getting rolled into a delinquency status or even foreclosure.

Contact our firm for a free case review

How to Correct Errors Fixed when You Mortgage Loan Forbearance Ends

If not corrected, mortgage servicing errors continue to spiral into debt collection phone calls, collection letters, robo-calls to your cell phone, demands for money you do not owe, notice of default, threats of foreclosure and even foreclosure notices and foreclosure suits. In many cases it's possible to stop foreclosure. We have seen numerous cases involving simple, easily detectable errors made by lenders and mortgage loan servicers that proceed to foreclosure proceedings even though the borrower repeatedly notifies the mortgage company of their errors. When these errors are not picked up and corrected by the company, the homeowner is left with the task of cleaning up the mess made by your mortgage company. You need a foreclosure attorney from Humphreys Wallace Humphreys.

We defend the rights of homeowners against wrongful debt collection and wrongful foreclosure threats, and we defend against foreclosures brought about by mortgage servicing errors. If you live in Oklahoma or New Mexico we can assist you directly as your foreclosure lawyers. If you live in another state, we have co-counsel relationships in many states and may be able to offer you representation with locally licensed counsel or a referral. Contact us for a Free Case Review.

Federal law—the Real Estate Settlement Practices Act and Regulation X—give you the right (and the DUTY) to demand answers from your mortgage loan servicer in specific situations.   Mortgage servicers must also correct errors if you follow the required procedures exactly. You must: 1) submit a written letter; 2) your letter must be addressed and mailed to the address your mortgage servicer designates as the address where Qualified Written Requests/ Notices of Error are to be sent; 3) your letter must include your property address, your name and account number; and, 4) your letter must contain specific details which include the reasons for your belief that the account is in error. See below for specific details that you need to follow if you want to resolve your mortgage servicers mistake or get the information you need. 

How to Write a Letter to Your Mortgage Loan Servicer

• Include your name, property address, and mortgage account number. • Use the name that is on your mortgage and include your spouse or other co-borrower if they are on the mortgage. • Identify the error. Tell your mortgage loan servicer exactly what error you believe occurred.

• Give important details: “I made my January payment on time. I paid $1,500 on January 1 but was still charged a late fee.” • Be specific. Rather than writing “you did not apply my payment correctly,” explain how you believe the payment was incorrectly applied. • Include documents that prove what you are saying. For example: “I completed my chapter 13 bankruptcy plan in April. You agreed I was current on my loan in your response to the notice of cure. In May you charged me $1,000 in “Lender Paid Expenses.” I am enclosing your response to the notice of cure showing I was current and your May statement where you are charging me $1,000 for Lender Paid Expenses. Please explain the Lender Paid Expenses charge and please remove them from my account as they are not owed.” • Be fair. Do not overstate the problem or ask for more information than you need. Don't use a form letter off the internet with a laundry list of complaints or requests for information.

• YOU MUST SEND YOUR LETTER BY CERTIFIED MAIL RETURN RECEIPT REQUESTED. KEEP THE PROOF OF MAILING AND THE GREEN CARD TO PROVE THEY GOT YOUR LETTER. YOU MUST KEEP COPIES OF YOUR LETTER AND EVERYTHING YOU SEND WITH IT. BE SURE TO LIST AT THE BOTTOM OF YOUR LETTER A DESCRIPTION OF THE DOCUMENTS YOU ARE SENDING AND KEEP COPIES OF THEM. 

Where to Send Your Letter

You are required to send your letter to the address designated by your mortgage servicer as the address where it will receive Qualified Written Requests or Notices of Error. You can usually find this on the monthly mortgage billing statement or in the letter you received when your mortgage servicer first notified you that it would be servicing your loan. You may also find this information on the mortgage servicer's website. Worst case, call your mortgage servicer and ask “What address do I use to send you a Notice of Error?”

Before mailing your letter, be sure you date, sign and make a copy for your records. We recommend that you mail the letter via certified mail-return receipt requested so that you have proof your servicer received your letter. Also be sure to keep a copy of your expenses for mailing.

What to Expect

• If you follow these instructions, the servicer must acknowledge receipt of your request and either:

• Correct the error and confirm that the error was corrected, or • Investigate and determine that no error occurred, and send you a notice explaining why.

• Your servicer might ask you for more information about the error, but your servicer can't refuse to investigate or determine that no error occurred because you didn't provide the information. • A servicer does not have to investigate your request for error resolution if:

• The request is overly broad, • You are sending in the same request repeatedly, or • You are requesting help with a loan that was transferred to another servicer or paid off more than a year ago.

• The servicer must acknowledge your letter within five business days of receiving it. • If you are writing to say your servicer improperly started or scheduled a foreclosure:

• The servicer must respond to your letter before the foreclosure sale or within 30 business days of receiving it, whichever is earlier, if your servicer receives your letter more than seven days before the sale. • The servicer should make a good-faith effort to respond to your letter, if your servicer receives your letter seven days or less before the sale.

• If you are writing to say the servicer gave you an inaccurate payoff balance, the servicer must respond within seven business days of receiving your letter. • For all other errors, the service must respond within 30 business days of receiving your letter. • In some cases the servicer may come back to you in writing and ask for additional information or request an additional 15 business days to investigate and respond to your request.

Contact Humphreys Wallace Humphreys for a Free Case Review or possible referral to a foreclosure lawyer in your state. We may be able to offer a co-counsel relationship with a foreclosure attorney in our state if your home is not located in Oklahoma or New Mexico.