My husband lost his job and we were recently granted a forebearance by our mortgage company (Wells Fargo) for four months (no payment of the mortgage until September 2009, when all payments would then be due). Right now, we both have credit scores in the high 700s and have paid our mortgage (all payments) to date. How will this affect our credit (if we sign the forebearance letter and stop paying until September?) Is it the same as just defaulting on the mortgage or does it look better on a credit report? Wells Fargo tells us it will show up on our credit report as a "default" but will have a notation "paying under partial payment plan". Is that better than just not paying? The reason I am asking is that he may have a job by next month in which case we will want to renegotiate our mortgage so we don't want to ruin our credit if signing this letter does that.
Thank you for any fast responses - we have to sign this asap!