I’m in foreclosure by my lender offers a “Forebearance Agreement” – What to do?

I’m not sure if this is a scam or an example that the left hand doesn’t know what the right hand is doing. 

Here’s what happens.  The homeowner is a few months behind on the mortgage.  Let’s say he makes payments to Ocwen.  Now, a lawyer for a bank, let’s say Wells Fargo Bank as Trustee, sues the homeowner for foreclosure.  Now, the homeowner gets a letter from Ocwen saying, “We want you to keep your home, just send us $2,000 now and an additional $1000 per month until you are caught up.”  And while they’re at it, they want the homeowner to sign an agreement giving up all defenses and saying that everything Ocwen ever did is just fine.

In the meantime, the lawyer handling the foreclosure plows along toward foreclosure totally ignorant that Ocwen has offered anything to the borrower.

What do you do? 

If you really want to make some kind of forebearance deal with the lender, watch out.  Why?

• You may have important defenses – you need to see an attorney.
• Unless you document your agreement, in court, it won’t stop the foreclosure.
• The attorney handling the foreclosure may be going ahead rapidly toward the foreclosure without knowing, or caring, that the servicer has offered you anything.
• Any money you give the servicer might be down the drain if you lose your house to foreclosure.
• Make sure that any deal offered to you is in your interest – get legal help to decide.
• Make sure that you can afford the payments offered by the mortgage company – otherwise, you are just delaying the inevitable and throwing your precious earnings away.

Related posts:

1. Non-judicial foreclosure – act immediately or you’ll be on the street!
2. Should I sign a mortgage modification agreement?
3. Solving the Foreclosure Crisis – Part 3 – What is the Pooling and Servicing Agreement?