Mortgage mess left over from Ike

April 1, 2009 4:25:28 PM PDT
Six months ago Hurricane Ike slammed the Texas coast and caused a lot of damage to property, but now it seems the storm has hurt at least one family's mortgage. After the storm hit, some mortgage companies offered deferred payment plans to customers. They are called forbearance plans and can help you get over a disaster, but one Pearland man tells us he needed to be rescued from the rescue plan.

Mark Passwaters' home suffered moderate damage from Hurricane Ike, but he was unsure what the storm would do for his business. When his mortgage company offered him the chance to delay making payments for a few months, he agreed.

"They called and said a forbearance program had been established for victims of Ike and they would be able to miss payments through the end of January and there would be no effect to their credit and they would not incur any interest," he told us.

Passwaters says he kept in contact with Countrywide and things went well until January.

"We did not hear from them after around the 25th of January and I would receive our statement, our monthly statements that said, 'your account is delinquent.'"

Passwaters says he immediately called to find out about the delinquency notice and says he was told by customer service representatives not to worry about it. Then he then got a registered letter.

"It was a letter from Countrywide dated January 27th saying we were in default, owed $6,000 and it needed to be cured by February 26th," Passwaters recalled.

Passwaters says he called Countrywide again to find out what was happening with his mortgage and was told he was in default because he owed $6,000.

So we contacted Countrywide. Citing privacy concerns, a Countrywide spokesperson told us he could not comment on the specifics of the Passwaters forbearance deal. However Countrywide has now told Passwaters he has six months to pay off the missed payments on the loan and fees and interest have been waived. The company added the Passwaters quote, "remain protected from credit reporting activity at this time."

Dan Parsons with the Houston Better Business Bureau says loan forbearance programs can be great, but when problems crop up and mortgage companies are unresponsive, home owners should contact state officials immediately.

"They set up a procedure where people thought they could do it," Parsons said.

Countrywide did not admit any wrongdoing in this case, in fact the company says while forbearance provides a temporary break in a payment schedule, it does not waive what is owed or interest charges. It's up to the homeowner to ultimately come up with those missed payments. Keep that in mind if you are ever offered forbearance.

So is forbearance a bad idea?

Not at all, the plans are offered routinely, but it is important to get the terms of the forbearance in writing and understand them. In this case, the Passwaters say no one discussed making a lump sum payment after the plan ended or that they would be considered in default after the forbearance ended.

Countrywide says they are now working with the family and loan default is off the table.

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