Sign Hawaii Banking Forbearance Agreement Safe

Industry sign banking hawaii forbearance agreement safe

what's going on guys Patrick's here is popcorn Realty comm and today I want to go over the forbearance program because I've been getting a lot of questions from friends family and clients on whether they should pay their mortgage payment and maybe just use this forbearance program so that they don't have to pay it now there are a lot of pros and cons more cons really and three trap so you can fall into if you go down this route so in this video today I'm going to go over what those three traps are and why you might want to look into the finer details before you sign up for that forbearance program so stick around to get all the details see on the other side [Music] [Music] alright guys so we're gonna go into the forbearance program that the carries act that the government has put into play and what those three traps are when trying to slip into this forbearance program so before we go even into the traps let's first discuss what the forbearance program is what a lot of people think is is that oh well the forbearance program allows me to not have to pay my mortgage payment for three months and I can basically live for you for $0 and let me say and be the first to say that is absolutely 100% not true you are basically pushing your payments till the fourth month and then you're not to make a balloon payment and we're gonna go a little bit deeper into that but I just further wanted to say you have to pay those monthly payments maybe not now but you definitely gonna have to pay it later so let's go into what those three traps are okay guys so let's let's get into how this trap hall works right so a lot of people like I mentioned before think oh I don't have to make my payments for three months and that's it but that's not the case at all what's going to happen is the bank's gonna call you or you're gonna call the bank because you want to set up a forbearance program and they're gonna say yeah first second and third month $0 you ain't got to pay anything but where they get chip is on the fourth month so the fourth month comes up and guess what you now have to pay your first second third and now that fourth month of a mortgage payment all in one lump balloon payments um what's crazy about this is if someone couldn't pay their first second or third mortgage payment how is it going to be possible that they're gonna be able to pay for mortgage payments all at once and this is the trap you got to watch out for because the cares Act does protect you that you will not get a credit dinged for missing your first second or third payment my G you do have to actually set up a forbearance program you can't just stop paying and then if the credit doesn't get affected you actually do have to talk to somebody but nonetheless your credit doesn't get affected here but by the fourth month if you don't make that balloon payment you better believe your credits gonna get a big deem and it might even put you into the situation where you might have to do a short sale or foreclosure and then by that point your credit is really gonna get shot so this can be a really really ugly trap that you want to avoid if possible so I mean it's hard times right now but you can make that mortgage payment and avoid the forbearance program I highly highly suggest it so where the trap really kicks in is you know you call the bank and you say yeah I'm not gonna really be able to make out forth payment and what they say is ah don't worry about it we'll talk about it when the fourth month comes just relax stay safe and we'll go over that when you know when we get there so for the next three months the banks are going to go yeah sure we're not going to charge you any fees you know we're not gonna we're not going to charge you in your fees we're not gonna screw your credit you are good to go but then that fourth month comes and like I mentioned before by that fourth month all this stuff is out the window they can't charge you fees they can screw your credit and that's where this gets really ugly and you're basically backed in a corner and you have to do whatever the bank gives you and that's usually some really bad option so let's go over what those options are so the first option is then they can give you a three month or more extension so basically they say yeah sure we'll give you three more months but really is not the best situation if you couldn't pay those last three or four payments before and then an additional three months added on that so you're looking at six or seven months that's a really bad situation that you probably don't want to be in and I know I wouldn't want to be in at all so that's really not a good option so now let's go into option number two okay so option number two is the fourth month comes up and you know we heard them say yeah justjust just give us a call in that fourth month if you can't make the payment well it will give you some options well what are those options the first option is a loan modification which can be expensive and really not something you really want to do if possible the second option they'll give you is to basically sell the property short in a short sale and the third one is to get foreclosed on and all of these are horrible options and very expensive both of them will have tons of fees and screw your credit once again so this both these options aren't good and once again further encompassing what this trap looks like so that's a trap number one okay so let's say that you know you're not in a situation where you can't use forbearance you have to use forbearance what can you do well let me explain to you what I would do if I was in that situation what you're gonna want to do is right up front in that first month you need to have these discussions so that you don't have to go down the route of taking those really bad options that the bank is offering you in month four so what I would do is I would blow these guys up and basically look to get a written payback agreement and the first thing I would do is see if you can get basically an installment plan set up and say okay well I can't make those three months or even four month payments so let's break them down into 24 months and kind of slice them up and just add them to the current loan that you have right now that would be of another option an option two which would be the best option but probably really difficult to get is to have them take those three or four months you have and have them add it to the end of the loan furthermore I would make sure that you get this and you get this all in writing you have to get this in writing then you won't get dinged on credit or hit with any crazy fees so you want to make sure you get that in writing very very important so that's trap number one how it works and what I would do if you find yourself in that situation okay let's go into trap number two so currently check out my other video going over the mortgage crisis but lenders are really strict in their rules and regulations on what types of loans are giving out what type of credit score you need to even get a loan jumbo loans were cancelled for a bit there it's just getting really difficult to get a loan in the first place so imagine that you go into forbearance and what will happen is if you get a loan and you go into forbearance if you try to get another loan somewhere else you will not qualify and that's pretty obvious because if a lender sees that you have a loan and you've gone on forbearance on that loan why would they think that you're gonna be able to pay their second the second loan you got you're most likely go into forbearance there too and that's too risky for them they don't want to lend you money that you can't pay back so then you wouldn't qualify and you would just really be putting yourself in a bad situation if you're at all trying to build wealth through real estate and this is the same not only for trying get a new loan but also if you're trying to do a cash out refinance any of those things where you're trying to leverage that asset that you have you will not be able to do that so the further more screwing yourself down the line so here's trap number three if you take forbearance you are pretty much just eliminating your right to evict a tenant so right now you can't evict a tenant because of what's going on but if they do something crazy like their turn up the walls or they've got all kinds of people staying there or their Airbnb in their place when they're not supposed to be and you take forbearance you can't do anything about it you can't evict that person even if they're breaking their lease in the rules and regulations you've put in place and even if you're just taking forbearance because you're trying to be a nice person and going hey you know what they can't make their payments I'll take forbearance so then I'll have to take on that stress but what if that person just completely flips the script on you starts doing them way illegal things that they shouldn't be doing and you can't do anything about it because you took that forbearance so that's trap number three so all in all forbearance yes there are some our opportunities and certain people can take forbearance pay it back and it's really helping them out but for a lot of those people 2.9 million people who've actually filed for forbearance I'm a little worried to see what happens in August when that fourth month comes up and a lot of people who aren't educated in knowing how it works and what the outcome could possibly be should be interesting to see what happens to the real estate market because I foresee there being yes I can see that the government is propping up the real estate market right now by not allowing foreclosures and short sales to happen in the next three to four months but that hoards month comes up should be interesting to see what happens anyways guys now you guys know what the three traps of forbearance are how it works and why I would probably try to avoid it if possible but that's pretty much it if you guys have any other questions put them in the comment section down below if you like this video smash that like button and I would appreciate if you click that subscribe and bail button if you want to get more of this content directly to your inbox so you guys have a beautiful day I'm Patrick Patrick lolling realty calm and I'll talk to you soon Aloha