This is an update to the “What is Mortgage Forbearance – Can I qualify due to COVID-19” video that I did a few days ago as more light has been shed on the mortgage forbearance options being offered by lenders/banks at this time. In this video, I discuss questions that I’m getting from viewers about how to proceed as well as discuss in more detail the 2 different programs that most lenders are offering at this time.
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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.
Who can qualify for mortgage forbearance?
Homeowners who have lost income or their jobs due to covid-19 could be eligible to have their mortgage payments delayed or reduced for a few months. You will need to contact your lender and explain your situation to see what options are available to you at this time.
As I suggest in the video, I would continue to call and check in with your lender as I expect the options to change if the virus continues to spread and more people are effected.
What is the mortgage forbearance program?
This program is pushed by the federal government at this time 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 delayed or reduced for a few months based on what I’m currently being told but as we get more information, I’ll continue to do updates.
Can I stop making my mortgage payments?
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.
How will the mortgage relief program affect my credit?
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, mortgage forbearance or forbearance mortgage, please call me directly or comment below.
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