Forbearance is being talked about everywhere. I wanted to give you the most current information we have on what it means and its possible implications.

What We Know:

• Is it FREE? – NO
• What does Forbearance mean?
  • That you may not have to make a mortgage payment for up to 6 months
• Should someone enter into Forbearance on their mortgage?
  • ONLY if they’re experiencing financial hardships due to loss of employment/unforeseen circumstances
  • Pay as much as possible, each month, for as long as possible
• Will Forbearance impact credit? – NO
• Are those 6 months of payments forgiven? – NO
• What happens to those 6 months of payments?
  • 4 options:
    • Reinstatement – At the end of the Forbearance period all of the past payments are due in addition to the current payment
    • Repayment Plan – The missed payments will be divided by 12 and added to the normal monthly payments over the next year
    • Deferment – The missed payments are added to the balance of the existing mortgage
    • Modification – Due to financial hardship, the borrower has to work with their Servicer to modify the terms of their existing mortgage
• Will Forbearance on an existing mortgage negatively impact clients ability to refinance or purchase a home in the future?
  • YES – Servicers and Lenders have already stated that they will not “buy” loans if borrowers had previously been in Forbearance

If you’re in need of good mortgage counseling, I can connect you with my partner Malcolm at Fairway. Contact Laurel directly.