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What stipulations has your bank provided for your mortgage forbearance?

Answered by:

Linda Humason

Linda Humason with Lindan Custom Designs LLC

7 Questions answered

Answered on May 4th, 2020

Realtors, please do not offer your clients advice on forbearance or deferral. After reading several of these comments, many do not know the correct information and could give bad advice to clients and get them in trouble.

The only advice a Realtor, or even a loan officer for that matter, should give to clients when asked, is that the borrower should contact their loan servicer (not the lender) and get the information for available options specific to that lender. Get the details in writing. Make sure you understand the consequences, penalties, and limitations of each option, before choosing.

Above all, if you have the means to make the payments do so. Do not choose forebearance or deferral just because they are offering it to anyone who asks, without proof of financial need.

There are consequences for each option available. You may not be able to refi or get another mortgage for a year or more. Some options require you to pay all the missed payments, plus the current payment all at once. Some lenders may report the forbearance to the credit bureaus differently, which could affect your credit scores.

My company, Guild Mortgage, for example, offers four different options for forbearance or deferral. Every loan servicer will be different.

from

May 5th, 2020

I echo the comment above that the first thing to do is contact the Lender/Servicer of the mortgage - which may or may not be the same. I am a HUD-Certified Housing Counselor and have worked with pre-foreclosure clients since 2008, assisting clients with workout options. Because of the volume of forbearance cases, there are more options available now after a forbearance than there were during the last foreclosure crisis. Forbearance was always the worst option available due to the possibility of having to make a lump sum payment. However, having to do a lump sum payment is NOT the only alternative after a forbearance. As was noted earlier it depends on who is the investor of the mortgage; FHA, Fannie Mae, Freddie Mac or a Private Investor - which could be the lender. What is different now, from the previous crisis is that FHA and the GSE's have put in place alternatives to the lump sum payment such as adding the payments to the principal and spreading the payments back out over the remaining term/30 years; repaying the past due amount over 3-6 months and other options. What is available to YOU will depend on your circumstances. Will you be employed after the forbearance period? Will you have decreased income, etc. Reach out to a HUD-Certified Housing Counseling Agency near you for assistance. We have the experience and training and contacts to assist with obtaining workouts - and our services are free to you by law. I also agree - if you can, make the mortgage payment. Also, I noticed that Bankruptcy attorneys are gearing up their services to help you "save your home". Bankruptcy should be a last resort - and a Chapter 7 will not save your home. A Chapter 13 is a forced repayment plan that may save your home if you can afford it. Know the difference. Again, reach out to a HUD-Certified Housing Counseling Agency before paying someone to save your home.

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