Section 4.13. Primary loan forbearance.

 

(1)   Definitions. In this section the following terms shall have the meanings designated:

(a) "Agreement" means an oral or written agreement to pay the delinquency owing on a primary housing loan over a period of time so that the loan may be brought current in accordance with the provisions of the mortgage and mortgage note.

(b) "Forbearance" means suspension of the acceleration of the balance due on a primary housing loan on the basis of the compliance of the mortgagor with the terms of an agreement.

(2)   Exclusive remedies. The forbearance provisions contained in this section are the exclusive remedies of primary loan mortgagors under s. 45.32 (9) , Stats.

(3)   Request for forbearance. A written request for forbearance shall be submitted to the department by a primary loan mortgagor through the authorized lender servicing the loan. This request shall set forth the anticipated duration of the delinquency, the terms under which the delinquency will be repaid and the reasons for the delinquency. If the mortgagor receives rental income from the property mortgaged to the department, the mortgagor must agree in writing to assign this rental income to the department to be applied toward primary loan payments due until the loan is brought current. Full written financial disclosure may be required of a mortgagor in any case where the authorized lender or the department determines that the disclosure is necessary to enable the department to make a determination on the mortgagor's request for forbearance. Failure of the mortgagor to provide the disclosure in a timely manner are grounds for denial of forbearance.

(4)   Approval by department.

(a) The department may approve an agreement if the information contained in the written request for the agreement establishes to the department's satisfaction that the delinquency will be made up within a temporary period acceptable to the department and that the mortgagor will probably be able to comply with the terms and conditions of the proposed agreement.

(b) The department may not approve an agreement if the mortgagor has been in default prior to the inception of the delinquency to which the agreement is to relate unless the mortgagor is able to establish to the satisfaction of the department that the previous default resulted from unusual and unforeseeable circumstances or is able to provide additional security for the primary loan either in the form of a guaranty of part or all of the balance due on the loan or in the form of a mortgage on other Wisconsin real property in which the owners have sufficient equity.

(c) The department may not approve an agreement if the delinquency to which the agreement is to relate was primarily the result of financial mismanagement by the mortgagor unless it is determined by the department that the agreement will probably result in the loan being brought current in accordance with the terms of the agreement.

(5)   Form of agreement. An agreement shall be in writing if the delinquency will not be fully repaid within 6 months from the date the agreement is entered into. The department may, however, enter into an oral agreement if the delinquency will be fully repaid under the terms of the agreement within 6 months from the date of the agreement.

(6)   Modification of agreement. Upon the request of the mortgagor or the mortgagor's representative, the department may modify or consent to the modification of the terms of an agreement. Any modification shall be in writing and shall be signed by the mortgagor. Not more than one modification to an agreement may be approved unless the department determines that extenuating circumstances necessitate a subsequent modification and that the current market value of the property mortgaged to the department is sufficient to warrant subsequent modification.

(7)   Failure to keep agreement. If the mortgagor fails to make payments required by the agreement and the department determines that modification of the agreement is not warranted, the department may notify the mortgagor that the agreement has been terminated and accelerate the primary loan balance.

History: Cr. Register, May, 2000, No. 533 , eff. 6-1-00.

Note

A special forbearance/repayment agreement form is required in connection with the creation of s. VA 4.13 . A copy of this form is available at the department of veterans affairs. Microsoft Windows NT 6.1.7601 Service Pack 1