Caroline Gerardo, C. G. Barbeau the Loan Lady nmls 324982 (Sun West Mortgage Corporation)

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Alan May
Jameson Sotheby's International Realty - Evanston, IL
Helping you find your way home.

Let's ignore the first part of your statement (8600 forbearance $645,000,000.00)... neither of those numbers makes a lick of sense.

Six months of payments ($1,250 per month x 6 = $7,500 of payments delayed)... and come the seventh month... all six of those months become due PLUS the seventh month.  So really $8,750.00 will be due in October.

The likelihood that the borrower will be capable of coming up with $8,750.00 at that time is slim.  Some lenders will allow the $7,500 to be paid out over time (maybe 6 mos. to a year)...  So let's think a year.  That means in October, they'll owe the $1,250.00 regular payment, plus $625.00 (1/12 of the $7,500 over a year)... for a balance of $1,875/month for the next full year.  The likelihood that the borrower will be able to manage that is perhaps better, but still slim. 

Of course that doesn't take into account any of the interest that's accruing all along.  You're right... it's deep, indeed.  He's in it up to his knees, and he's facing head down.

This is what consumers don't understand about forbearance.

Apr 08, 2020 02:16 PM
Rainmaker
5,816,564
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Many home owners face this issue.

Expect a flood of foreclosures next year.

Apr 08, 2020 12:00 PM
Rainer
207,418
Don Baker
Lane Realty - Eatonton, GA

Our lender, PNC sent us an email saying it could be added to 12 additional months at end of loan.  Interest would be added to principle amount.  They also offered to let us pay interest only for 12 months without any additional to principle amount.  So it's important to know what the offer is and how it plays out in the end.

Apr 08, 2020 02:02 PM
Rainmaker
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Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

Easy.  Do our part and pay our mortgages.

Apr 08, 2020 12:52 PM
Rainmaker
3,645,742
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

If a freight train is zooming past us at 100 miles per hour and a chicken crosses the road, what's for dinner?  And when will be it served?  And where?  Is it any wonder why the Agent Professor real estate students wonder which type of math is most prevalent in the industry?  

Apr 08, 2020 12:22 PM
Rainmaker
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Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

Based on my experience with The Crash, I make my own economy; I can not control nor concern myself with what others do or do not do. I take responsibility for building my ark so I worry not abnout the weather. I can't control the flood-which may or may not come, I can only be prepared for it.

Apr 08, 2020 03:26 PM
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Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams Fox Cities - Stevens Point, WI
Forestland Experts! 715-204-9671

Unfortunately this will be the start of the next flood of foreclosures in this country, we all need to be ready for this.

Apr 08, 2020 03:13 PM
Rainmaker
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Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

I just had a flashback to my taking the real estate exam days when this question came up, I marked it for a second reading at the end of the test. When several came up, I started to wonder if I would pass? Memory lane

Apr 08, 2020 01:14 PM
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Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

That is unrealistic and could potentially cause short sales or foreclosures to flood the market. Some lenders are offering to tack mortgage payments on the end of the loan...a better scenario in my opinion.

Apr 08, 2020 12:53 PM
Rainmaker
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Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

I imagine the help will come in the form of short sales.  It will be time to roll up the sleeves and get to work. 

Apr 09, 2020 09:10 AM
Rainmaker
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Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

I am already hearing, seeing and predicting nightmares. If they can not pay the mortgage now, they will no way be likely to come up with 6 months mortgage payments in 6 months. I spoke with one bank on behalf of a client who said on the 5th month, they will look at options if they can not pay. That means the stress will start all over. They will have to refinace, sell or lose home? There is another program that puts the interest at the end of the loan, but you have to ask for it when applying for forebearance. No one tells them that, 

Apr 09, 2020 05:36 AM
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Bone up on your distressed sales skills, that's all we can do.  Already working with Short Sales again as of this year.  

Apr 08, 2020 05:05 PM
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Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

why would "we" help these homeowners.  I pay the debt I have created.  I always have, I always will.

Apr 08, 2020 02:18 PM
Rainmaker
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John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Caroline Gerardo it will difficult to for some borrowers to come up with the forbearance amount.

Apr 08, 2020 02:18 PM
Rainmaker
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Tony Lewis
RE/MAX of Valencia (Hall of Fame) 30 year Valencia Resident - Valencia, CA
Summit Real Estate Santa Clarita & OC Laguna Nigel

I think they allow it to be paid back over several months.

Apr 08, 2020 02:07 PM
Rainmaker
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Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

645 M???

How to help them? I do not know.

Depends on the reason for the loss of income . . . 

Apr 08, 2020 12:49 PM
Rainmaker
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Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

Since when are balloon payments okay? First, those terms need to be clearly explained and second, negotiated in a way that will not cause a foreclosure, say in Octotber, to use your example.

Apr 08, 2020 12:41 PM
Rainmaker
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Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg Real Estate

I don't know if all your numbers are right there but, yes, he is in deep do-do in 6 months for the $7500. Unless, he can take out one of those small business loans or the other loan options based on their unemployment.

Apr 08, 2020 11:46 AM
Rainmaker
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Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co. Notary Services, retired Realtor

I give up... That's what Mr Cooper will be saying in 6 months Caroline Gerardo 

Apr 08, 2020 11:40 AM
Rainmaker
1,083,340
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Mr C has sent a lot of orders out asking realtors to assess the home values. However, few homes if any here are under 1.2M. They now ask appraisers to evaluate anything over 1M. 

Apr 09, 2020 07:11 AM
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Frank Rubi
Frank Rubi Real Estate, LLC - Metairie, LA
FrankRubiRealEstate.com

My thought is we're gonna get busy. 

Apr 09, 2020 06:22 AM
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Caroline Gerardo
Sun West Mortgage Corporation - Newport Beach, CA
C. G. Barbeau the Loan Lady nmls 324982

Please remember MR. C has to front the money for the borrower to the owner of the note. There is no federal bail out for servicers, yet. Servicing is a business that runs on margins. They will foreclose on high risks and now 11 years after the last crash there are more snoop tools to be able to recover.  Servicers will offer reasonable terms to borrowers who appear solid. In general taking one of these deals may not be the winning ticket. I suggested to someone offered the deal I mentioned that they would be better off getting a second job for a couple months and let go the cleaning service, turn off HBO package, pack your lunch, and take in grandmother rather than give her money for her apartment.

Apr 09, 2020 04:29 PM
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

Just FYI, we have a Mr. C loan on one of our rentals. They are offering this to all mortgage holders and in their words, the number of payments that you forego will be added to the end of your loan - same monthly payment for 6 months (if all 6 are used). 

What will be due in October is your normal monthly payment.

Apr 09, 2020 10:02 AM
Rainmaker
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Greg Cremia
Shore Realty of the Outer Banks - Nags Head, NC

Our president will fix it.

Apr 09, 2020 05:15 AM
Rainmaker
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John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

Forbearance is simply stalling the day of reckoning. There is no plan in place to deal with borrowers' inability to make up the delayed payments.

Apr 12, 2020 05:06 PM
Rainmaker
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Lynnea Miller
Bend Premier Real Estate - Bend, OR
Premier Real Estate Service in Central Oregon

One reason why since the last recession, we have personally been planning for the next and have paid off our mortgage. When you have no debt, this scenario doesn't apply.

Apr 11, 2020 08:40 AM
Rainmaker
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Peter Mohylsky. The Santa Rosa Beach Expert
PrimeSouth Properties - Santa Rosa Beach, FL
THE BEACH IS OPEN

One step at a time is 5e short answer

Apr 10, 2020 04:08 AM
Rainmaker
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James (Jim) Lawson, DBA
DomainRealty.com LLC - Bonita Springs, FL
Broker Associate, RSPS, BPOR, HI & PE

Always know the nuts and bolts of what you are agreeing to and assess the implications. That's why when I used to borrow money I always asked to see the note first. Don't show me the note well in advance, so I can take a few days to consider the offer, then no deal. Same idea applies to forebearance. Thoroughly think it out!

Apr 10, 2020 01:07 AM
Rainmaker
541,121
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Hi Caroline, The GSE backers (Fannie Mae, Freddie Mac, USDA, FHA, VA) are supposed to offer the borrower options at the end of their forbearance period.  They can be spreading out the missed payments, refinancing the mortgage to include those payments, added a second note payable at the end, or a lump sum.  All of it, I am sure, will require oppressive financial documentation from the borrower. I hope that these entities and other mortgage servicers are in fact required to automatically grant a deferral. It doesn't help the investors, but maybe there will be another bailout, as you mention.

Apr 22, 2020 02:07 PM