Forbearance: Part II Application In! Now what?


Wait. Wait. Wait. It Will Take Time for the Bank to Respond. Then…


During the Forbearance Agreement:


  •  You get relief from payments

  •  The bank reduces or suspends your payments for a specific time period (usually months)

  •  The bank freezes pending or in process foreclosure actions


After the Forbearance Agreement:


  • You make your normal payment PLUS an additional amount to pay off the arrearage.


As with any legally binding agreement, you should have this new contract reviewed by your attorney before you sign.  Even banks make mistakes.


Getting Approved!


Each bank’s process is different, but all banks want to see your basic financial information and will want to know why you are unable to pay your mortgage.  Be prepared with a good explanation that is honest, but compelling.   Leave emotion out of conversations when you speak to customer service representatives who are not paid to feel sorry for you.  You are a client with a crisis, but the bank is interested in the bottom line.  Be clear, specific, and accurate.   You will be asked for multiple copies of everything – check stubs, tax returns, verifications of income, etc.  Do not lose patience.  It is a process that can take months.  While banks are interested in restoring loans, they remain overwhelmed.  Know this before you apply. 


As prominent Florida attorney Gary M. Singer suggests, ‘If you get declined, try again.  Persistence will be rewarded. “


It worked for Joe.  His forbearance agreement saved him from foreclosure and restored his faith in the American Dream of home ownership.  Try the Forbearance Agreement. It isn’t fast food, and takes time, but it is a satisfying delicacy available to borrowers in a difficult market.


Don’t Stay Stumped!


Just got the annual financials from your HOA and can’t understand a word you’re reading? Get to your Board of Directors Finance Committee right way when the numbers don’t add or you just can’t make sense of the financials.  Your biggest investment is at stake and you deserve to know what’s going on.


When you are unable to determine the fiscal health of your HOA because the reports are late, unclear, or simply don’t make sense, reach out for answers right away. It’s a board of directors’ fiduciary responsibility to have reports prepared in language that lay homeowners can understand.  It shouldn’t take a professional accountant’s expertise to interpret financial reports dispersed to you or your neighbors.


Homeowner associations are required by covenants and state statutes to prepare and deliver financial reports using acceptable accounting principles.  The reports should set forth the assets, liabilities, income and expenses of the corporation in clear, easy to read language that also describes the accounting basis or method used to prepare the report.


Financial reports are not supposed to confuse you.  When they do, notify your board immediately because your confusion means they haven’t done their job and are technically breaking the law!  Chances are you aren’t the only homeowner stumped by the statistics. Help your community help itself by encouraging the board to deliver timely reports that make sense.

Selective Enforcement in the HOA


Rules are made to be followed rather than broken. In an HOA development, the Board of Directors or management company is responsible for insuring that the rules, regulations, and covenants are respected and adhered to by everyone.


After all, a big reason why people move to common interest developments is because maintenance is a high priority.  Homeowners willingly pay a monthly assessment to afford the ‘extra eyes’ that look out for and enforce rules and regulations.


Sometimes the best laid plans fail.  That is, occasionally an owner will feel slighted, and complain that the association is selectively enforcing the rules rather than following the dictates of the legal documents.  A homeowner may think that the association or management company is singling them out, and not being fair. When this happens, a lawsuit can follow if the homeowner and board officers or managers can’t come to a meeting of the minds quickly.


Selective enforcement is a legal defense available to homeowners accused of violating covenants. Association officers and managers must be consistent without exception. When boards of directors do their job, enforcing rules is non-negotiable, inflexible, non-arbitrary and applicable to every member of the association.


When owners suspect the association of selective enforcement, they must be able to identify what rule was broken, who broke it, how long the violation existed, and most importantly whether or not the board knew of the existence of the violation by the other party. The burden of proof is on the affronted homeowner to show that the board or management company didn’t penalize another owner for the subject offense.


Instead of resorting to lawsuits and depending on the selective enforcement defense, associations should install a grievance process that prevents extended disagreements and misunderstandings.  Often, it’s simply a matter of the homeowner wanted to be heard. When homeowners present grievances suggesting unfair enforcement of covenants, it’s time for the board or management company to stand at attention, talk, correct the misunderstanding, and move on rather than meet in court. Selective enforcement isn’t fair and doesn’t work under any circumstances.

To Forbear or Not. Average Joe did it. What about You?


During the recent economic downturn, financial disaster knocked on the door and invited itself in to the dinner table of millions of Americans,   What an unwelcome guest!  Traditional savings instruments and real estate equity were slaughtered and sliced.  Personal portfolios were devoured and swallowed and greed spurned crusty new investors that hoodwinked even the wealthiest of the wealthy.  What about Florida’s Average Joe with a Big Mortgage on his Only House?


According to Realty Trac’s July 2013 report, Florida was among the top five states for foreclosure rates during the first half of 2013.  In total, there were 155,264 Florida properties with foreclosure filings during the first six months of 2013.  The financial crisis lives on.  Consumers, especially Floridians, need to be as proactive as possible in preventing foreclosure now.


Thousands of Floridians have more mortgage than equity.  Banks know this and have built a few new doors for borrowers to walk through – if they’re willing to get a grip and do the work. Forbearance Agreements are an option for those unable to pay their mortgages. If you are having difficulty paying the mortgage, pause your panic button and reach out for help instead.  Learn your lender’s policy on forbearance agreements, a door of opportunity for homeowners in arrears.  Here’s what happened to Joe.


He lost his job.  He was able to get another one after six months but had zero income during the wait.  His savings were depleted, and there was no 401K to draw from.  After Joe missed three monthly payments, the bank started foreclosure proceedings promptly, with a Notice of Default letter sent to his house via certified mail.  Scary! 


After a round of tears, churning stomach, and overall panic attack, Joe called the bank.  Good idea.

If you are behind in your mortgage, contact your lender today.  Not tomorrow.  Today.  Ask about getting a Forbearance Agreement resolve the arrearage.