ANY EXPERTS regarding forbearance plans??? - Posted by OJ

Posted by John on September 13, 2005 at 22:41:57:

Remember the BK laws change 10/1 I believe maybe even 9/1 it practally eliminates the chapter7. Check it out for yourself, because I am not sure of facts on this

ANY EXPERTS regarding forbearance plans??? - Posted by OJ

Posted by OJ on September 13, 2005 at 17:34:23:

I invest foreclosures.
95% of the calls I get are from Owners who want to save their home.

I will start promoting loan modification and forbearance plans for these people. In return, I anticiapte 75% of these people will go back into forclosure.


Is a forbearance plan/loan modification useless for a person who has filed chapter 7 or 13?

Is a refinance useless for a person who has filed chapter 7 or 13?

Is a forbearance plan/loan modification useless for a person whose is unemployed or unsufficient income?

Re: ANY EXPERTS regarding forbearance plans??? - Posted by rm

Posted by rm on September 14, 2005 at 10:37:16:

The debt can be negotiated after a Ch 13 falls out, or after a Ch 7 is discharged.

If they don’t have the income to support the old payment, they will not qualify for a workout.

The arena you’re planning to expand into is fraught with risk and frustration. And the new federal BK laws will place more risk and responsibility onto your shoulders.

The reward is not worth the risk.

If you expect that % of people to fall behind again, why not just simply continue to mail to them AFTER their workout- which they arrange on their owne- for a pre-determined amount of time?

That way, you’re still in contact, and you haven’t had to do any of the heavy lifting/low-paying work required to keep them temporarily afloat?

Re: ANY EXPERTS regarding forbearance plans??? - Posted by Carmen_FL

Posted by Carmen_FL on September 13, 2005 at 21:23:56:

Not an “expert”, but here’s some advice.

Be VERY careful when dealing with people in pre-foreclosure. Some states even have laws that state what you can and cannot offer; whether you can charge or how much for helping; and very strict laws if/when you do buy from someone in this situation.

Now as to your questions, “useless” is a very fuzzy word. I know that, in order to approve a forbearance, a bank will want to know that they will be paid back within a certain period of time (say one year). Sometimes they will put some of the payments to the back of the loan, but normally they will want at least a payment or two up front, and usually also higher monthly payments to make up the shortfall. So …

If a person is not working/unemployed/or has insufficient income to pay not only their mortgage but their living expenses (food, utilities), chances are a forbearance will not be approved. This can be overcome sometimes if they are willing to rent a room, which will increase their income.

As far as someone who has filed bankruptcy, if it’s an 11, I would think that the payments will be worked out by the trustee and the courts. If it’s a 7, the bank can’t collect anything until the bankruptcy is dismissed or discharged, or they request that the secured property be released from the bankruptcy (I forget the term right now),so although it’s not “useless”, it will probably only be possible after one of those events. In any event, you will be dealing with the bankruptcy department, not the “loan modification” department until the property is out of the bankruptcy one way or another.

As far as refinances go … there are some lenders who will make loans (I’m sure at high LTVs and higher interest rates) to people even one day out of bankruptcy. If it’s an 11, I know it is possible to refi while in it, but they may be required to use some of the funds from the refi to pay off other debtors. For a 7, I’m not sure about this, but I do believe that they will require that the foreclosure be dismissed/discharged prior to making a loan.

So, “useless”? I don’t know; more difficult, yes. And again, please check your state laws to make sure you’re not running afoul of them, no matter what you do.