Are you currently considering mortgage forbearance? Have you spoken to your mortgage lender and wondering if those are the only options available? How do you know they are offering you the most favorable terms? In this video, I talk about the mortgage forbearance options that are being offered and what you should do when talking to your lender about forbearance.
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What is a mortgage forbearance?
A mortgage forbearance agreement is an agreement made between a mortgage lender and delinquent borrower in which the lender agrees not to exercise its legal right to foreclose on a mortgage and the borrower agrees to a mortgage plan that will, over a certain time period, bring the borrower current on his or her mortgage.
How does mortgage forbearance work?
This program is designed to help those that have been directly impacted by the coronavirus. Homeowners who have lost income or their jobs due to covid-19 could be eligible to have their mortgage payments reduced or suspended for up to 1 year. It all depends on their particular circumstances.
Homeowners can’t just stop paying their mortgage payments. Homeowners will need to contact their mortgage company (the company they send their payment to each month). My understanding is that the lender will not initially require you to provide any documentation but could in the future. You are not going to have to send in a ton of paper like the last financial crisis according to The lender will work with them to figure out a plan of either delaying payments or setting up a payment plan. Payments put off while a mortgage is in forbearance need to be made once the period ends. Some lenders expect a lump-sum payment, while others offer repayment plans.
Fannie Mae and Freddie Mac are directing lenders not to report people to the credit bureaus for late or missed payments if they are in one of these forbearance plans.
If you have additional questions about mortgage relief or mortgage forbearance, please call me directly or comment below.
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