We are writing to you because there is a lot of information out there right now on mortgage loan forbearance and we want to make sure you understand what this can mean to you and your loan.
First, what is a forbearance? With this option, you and your mortgage company agree to temporarily suspend or reduce your monthly mortgage payments for a specific period of time.
With thousands of layoffs and uncertainty you may be wondering what would happen if you missed your mortgage payment. The widespread misery spread by COVID-19 has left many homeowners scrambling to figure out how to pay their mortgage payments. You may have even heard that some lenders are allowing you to not make your payments for the next 3 months. Please remember forbearance is NOT FREE.
Many homeowners could be asked to pay back all of those missed mortgage payments in one lump sum at the end of the 90 day forbearance period, which could be a near impossible feat for many who can’t afford their payments today. Some lenders may allow you to add these missed payments on to the end of your loan, but you must have clarity from your lender on this. Government backed loans, such as Fannie Mae, Freddie Mac and FHA say their borrowers are never required to make lump-sum payments and they may offer assistance plans, but you still need to be careful. Even with government backed loans you will still need to make good on those missed payments eventually.
The Mortgage Bankers Association expects homeowners seeking forbearance to increase over the coming months. This is something we hate to see because we know this could lead to more problems in the future.
Please remember, nothing is FREE. If you can pay your mortgage, pay your mortgage. If you can’t pay your mortgage, or can only pay a portion, contact your mortgage servicer immediately. And unfortunately, expect to be on hold for at least 1 – 3 hours as most of these servicer’s are very busy right now. And please don’t hesitate to call us so that we can talk to you about your options! These are trying times and we want you to know we are here to help you through it.
The worst thing that can happen as a Realtor, is to hear that one of our clients is losing their home. Don’t wait too long. We can help you navigate through this. If you are in a situation where you don’t know what to do, please reach out to us!
Until we talk to you hopefully soon, STAY SAFE!