Add Forbearance Agreement Template Byline with airSlate SignNow

Add Forbearance Agreement Template byline

many homeowners did not know that when they decided to take a covid related forbearance plan from their bank and not pay their mortgage for six months or a year that at the end of that period a lot of them were going to have to come up with thousands of dollars of back escrow or pay it over a short period of time i'm gonna explain to you how that works and how to figure out if you are one of the homeowners who has to deal with that or one of the lucky ones who doesn't at the very beginning of the coronavirus in covid mess congress passed what's called the cares act the cares act is a law that basically tells banks that they have to allow people who have federally backed mortgages the opportunity to forbear their payments of their mortgage payments for up to 12 months we're coming to the end of 2020 the beginning of 2021. in march of 2021 the vast majority of the forbearance plans are going to end the biggest question and the one that most people are worried about is what happens at the end and specifically what happens to my escrow payments you have to understand something the cares act only covers federally backed mortgages it does not cover non-federally backed mortgages and we're going to go over that in a second but there is a huge difference if you have a federally backed mortgage if you don't have a federally backed mortgage if you do not have a federally backed mortgage your options are very limited as to what happens at the end of the forbearance if you have a federally backed mortgage you're pretty much in the clear and you can have a good 2021 because you're not gonna have to pay back huge amounts of money in lump sums so i'm going to explain to you how all this comes together with your mortgage your interest your taxes your insurance and how all that affects when the forbearance ends and how you can survive this forbearance period and come out of it keeping your home now i'm going to use some charge for that what you have to understand is when you take a mortgage out what the mortgage payment really is is something called p-i-t-i you're going to hear the bank representative refer to p-i-t-i you're going to hear that over and over again they'll say reflexively p-i-t-i now what does that actually mean the p-i-t-i is the principal interest taxes and insurance principal interest taxes and insurance that are the four components of the vast majority of people's mortgage payments the principal and interest is what you're paying back to the bank from what to let you borrow and the taxes and insurance are usually what's called escrowed what that means is you're pre-paying your taxes and insurance so the bank has an amount of money at the end of the year to pay those things for you now in a forbearance period nobody's paying the taxes and insurance so the taxes and insurance are what the bank is most worried about in the forbearance period because somebody has to pay that the bank will pay it for you and you will owe it the question is how quickly do you have to pay that back and that depends if you have a cares act or a non-care exact mortgage we'll talk about that in a second now let's assume that you have a two thousand dollar mortgage payment now the two thousand dollars is the total check that you write every month and you think okay that's all i'm going to pay that and we're not going to think about it anymore but if we go into the into the actual bill we're going to see that principal and insurance i'm sorry principal and interest or 1200 insurance and taxes are eight hundred dollars now that's really important again the principal and interest payment that's not real money that the bank is losing or getting anything out of or or losing if they decide to not charge you now the tax and insurance that is something the bank has to pay themselves so that's a big deal when you don't pay the escrow the bank is going to pay the escrow for you which means that it's money that they're paying for you that you're going to have to pay eventually now if we look at this example and we're talking about a 12-month forbearance which a lot of people are doing right now the 12-month forbearance basically is the total payment of two thousand dollars time as well as twenty-four thousand dollars so for twelve months you didn't pay you owe the bank twenty four thousand dollars the the principal and interest portion of that is twelve hundred dollars times twelve hundred dollars times twelve which is fourteen forty and the biggest thing we're talking about here is taxes and insurance which is eight hundred dollars times twelve which ends up being ninety six hundred dollars the escrow shortage is ninety six hundred dollars now the question is what happens to that ninety six hundred dollars the bank can very easily forebear this amount here fourteen forty because again there's no money coming out of their pocket that's just money that you're going to eventually owe when you sell refinance or do something with the house this 9 600 however is money that they wrote a check for and paid on your account so the question we have to ask and the biggest thing that we have to figure out for you before anything else is whether the cares act covers your mortgage if the cares that covers your mortgage then you don't really have to worry about this this is something that you will see a paper you'll see a lien eventually placed on your property uh for the full amount of twenty four thousand dollars in this example and you only have to think about it but if you're not cares act then we're going to talk about that in a second what happens so how do you know if you're a carers hack charizard is fha va fannie mae and freddie mac those are the four major uh federally backed mortgage companies um that are covered by the cares act now i'm going to put two links in the description box so you can look at those links and if you put in the address it'll tell you if it's freddie mac or fan you may fha you probably know if fha because you're going to get fha direct mailings from them and then the va obviously if you're a veteran you you probably know you have a va loan so the ones that are a little harder freddie mac and fannie mae because sometimes they hide behind but they're not hiding but they're they're they use servicers like wells fargo citibank those types of things those type of companies and you don't know if you're if your loan is federally backed but if you use this these links that i have that are basically open links that you can use to type in your address you can determine if you're a freddie mac or fannie mae okay so what happens to the 9 600 of the cares act that 9 600 is put into a lien with the rest of the money that you owe at the end of the mortgage now they might give you the opportunity to pay back the 24 000 over some period of time which i've said in other videos i believe that's the right way to do it because then you don't owe this money at the end but if you can't do that what the bank will do is take all the money that you owe and put it put a separate lead on your property that's not interest bearing that sits at the end that the daily you sell refinance or do something with the property you're gonna have to pay back so that's a good thing if you have a cares act mortgage now the problem is and the one that we have to worry about more which are the non-cares act now this is not an insignificant amount of people this is 30 percent of the mortgage in the united states our non-cares act what that means is there's over a million people right now million households that have forbearance plans that are non-cares act these people are at the mercy of the individual bank and the individual investors the banks will do whatever they want with you if you are in this situation sometimes they'll be very nice and they'll work with you but most of the time expect much harsher treatment than what we just discussed it's very unlikely that they're going to put a lien at the end with your to pay back at least the escrow portion the escrow portion i would imagine that you're going to have to pay back in some period of time now the 9 600 from our example must be paid back in usually 12 to 60 months so one year to five years usually now anything can happen each bank is different they treat their customers in different ways but that is what i've seen in the past and that's what i'm seeing now with my clients who are in non cares act forbearance plans they're going to have to pay back this 9600 escrow shortage over a year up to five years now there's a big difference the numbers are very good if you look at them like this we have 9 600 divided by 12 which is 12 months is 800 per month on top of your regular mortgage payment that means that your mortgage payment would go to 2800 a month but only for a year you make a sacrifice and you're back on track the other option is over five years or up to five years but usually they go the max if they're going to max it out they're going to max it out which means an extra 160 a month so in our example it's 2160 a month for five years and at the end of the five years your your payment will go down now remember tax insurance change constantly so these aren't perfect numbers but at least you kind of have an understanding if you you have to understand that when you don't expect the bank to put all that money at the end when you have a non-karzak mortgage they're going to want their payment if you are at the end of the forbearance get ready to make them bigger payment over a year over five years if they give you the option obviously you're going to take the longer option usually they give you the best option for you the maximum that they're willing to do but get ready your payment's not going to go back to to the two thousand dollars it's gonna be more now what do you do if you can't make the payment well i've talked about this in other in other opportunities what you want to try to do is do a loan modification if you can't make the payment then what you want to try to do is work with a bank submit a loan modification package so that they take all of the money that you owe them and turn it into one big either balloon at the end or rework your mortgage in some way so that you can afford your mortgage the most important thing here to understand is you have to communicate with the bank don't ignore the situation in a couple months all of the forbearance period plans are going to end federally backed and non-federally backed it's very important that when that happens you are in communication with the bank people make mistakes during that time when the mortgages are ending when the forbearances are ending and things are changing when that happens people make less people make mistakes like paying a little bit less or not making the full payment or or waiting to see what happens when you do that you run the risk of default when you run when you're defaulted you run the risk of losing your home through a foreclosure so it's very important that you talk to the bank and figure out what's going to happen with my escrow and how am i supposed to pay that back start talking to them now so you're not surprised in a couple months when the forbearance period period ends talk to them and if you need to apply for a little modification the time to do that is right now don't wait to the very last minute till you have no other options because the bank will at that point if you can't make your payment then you're gonna owe all the money that you owe them plus future payments you're better off modifying the loan now if you can and then hopefully keeping your home through a lower payment my name is diego mendez i'm a bankruptcy and loan modification foreclosure lawyer here in miami florida i've helped thousands of people with their loan modification and foreclosure issues throughout the years i was around in 2008 for the last crash and i'm seeing a lot of the same things happening this time around so if you have any questions i'll do my very best to answer them you can submit your questions in the comment box below i'll respond or do a video in the future if i think that's something a lot of people are asking me about this escrow situation is something that you need to you need to focus on it's very important if you want to keep your home that you do not let the bank do whatever they want with you again my name is diego mendez i'm here to help thank you very much for watching my video be sure to subscribe and to like my videos so i keep making these for you and for everybody who wants this type of information thank you