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Mortgage Hardship Deferment & Credit Rating Hit

CogCog What'd you expect?Registered User regular
in Help / Advice Forum
Short backstory - A few months ago, I lost my job. At the time, we contacted our mortgage company (PHH) immediately and asked what we could do about some sort of payment deferment. We were offered a 4 month deferral. Fast forward to now, and we're repaying the missed payments ahead of the deadline of the deferral, but we have found out that this escapade has demolished our credit rating (now sub-600).

Are we within our rights to ask that the company remove the hit from our credit rating? Is this a thing they can do? I'm failing to see what the point of the deferral even was, since it doesn't seem to have protected us in any fashion from wrecking our credit or aided us in any way in attaining (their offer of) a loan modification.

Do we have any options here, or do we simply take this one up the tailpipe and move on?

Posts

  • DjeetDjeet Registered User regular
    What does it say on your credit report? Did they say that as part of the deferral program they wouldn't report the account as late?

    Not sure what they promised, but normally if you were 120 days late you'd probably be in default and the foreclosure process would've been started.

    You could certainly ask them to go to the CRAs and take off the late notices, but not sure why they would do that for you.

  • CogCog What'd you expect? Registered User regular
    It said on our report that we were 30+ days late (Not 60 yet) and that our loan status was in forbearance.

    What I'm wondering is, what's the point of even applying for such a thing? We tried to be responsible borrowers (as much as possible under the circumstances) and proactively contacted them about the situation, but it looks like the end result -- understandably owe back payments, reported to CRAs as overdue -- is identical to if we had been total deadbeats about it and just stopped paying for a while.

    I'm looking for what the up-side of the forbearance supposedly is, and I'm seeing absolutely nothing compared to just not paying.

    I'm going to ask them to take the notices off at the CRAs but I dont have a lot of hope.

  • DjeetDjeet Registered User regular
    edited October 2013
    At 120 days late I'm sure you'd have been served notice of default and foreclosure proceedings would've commenced (and you'd have additional 30, 60 and 90 day late notices on your record). There would've been several attempt to contact you and you'd be responsible for all back payments plus penalties in order to prevent foreclosure. Exact timetables will vary by market and mortgage servicer, but this is what would've happened if you'd opted to just not pay instead of working something out with the bank.

    Djeet on
  • VeeveeVeevee WisconsinRegistered User regular
    edited October 2013
    Cog wrote: »
    What I'm wondering is, what's the point of even applying for such a thing?

    It seems to have moved the foreclosure process (that Djeet went over briefly) from the first missed payment to the fifth. That seems to be about it.

    Veevee on
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