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Recently fur-lowed employee considering mortgage forbearance.

So what is mortgage forbearance?

Mortgage forbearance is when a lender or servicer allows a borrower to defer their payments to a later date. This deferment could be in the form of a suspension of payments or a reduction or payments for a limited time. The goal of the forbearance is to allow the borrower some reprieve while they restore their financial situation. For a list of FAQ answered by the Small Business Administration check out this 10 Page List of Questions on Forbearance Forgiveness Answered by the experts as of August 4, 2020!

What Mortgage Forbearance Is Not

What mortgage forbearance is not, is payment forgiveness. While in forbearance, the borrower will still be required to repay any missed or reduce payments.

Once a borrower has returned to their previous financial position they should notify their mortgage servicer and resume your payments. It is recommended that it be done as soon as possible as to not incur more future debt.

Different Mortgage Forbearance Programs

Mortgage forbearance programs may have different options depending on the loan servicer, loan investor, the loan guarantor or insurer, and the type of loan. Make sure that you completely understand the terms of repayment. Some loans may require a lump sum payment once your financial health has been restored. Others may work out a variety of payment arrangements.

Mortgage Forbearance and Your Your Mortgage Servicer

Your mortgage servicer is the company that you send your mortgage payments to. To apply for mortgage forbearance, you will need the name of your servicer, their phone number and your loan number.

You will need to call your loan servicer to make a request for mortgage forbearance. Your loan must be a government backed or insured loan to qualify for forbearance. However, some states and none government loans may have their own forbearance options.

Beware Of Scams

If you’re facing Mortgage Forbearance it’s important to know what to look out for regarding potential mortgage relief scams. Remember your own intuition and instincts are typically accurate. If you feel uneasy about the assistance you are receiving there is probably a good reason. Scammers may try to do any of the following:

Charge large upfront fees for their services.
Make promises that may be difficult to keep.
Use fear tactics to scare you into using their services.
Ask you to sign over your property title.
Ask you to sign documents you don’t fully understand.
Suggest that you make payments to someone other than your loan servicer.
Advise you to stop making payments.
Promise you payments in return for your personal information or credit card information.

The Heavy Lifting

When facing potential Mortgage Forbearance it all starts with the borrower and the loan servicer. Once that conversation is complete the game plan should be established and mortgage relief can begin.

New FAQs Address PPP Loan Forgiveness Issues-8-4-20

If you have any questions reach out to Bill Byrd at 843-972-7670. Bill has been a licensed broker since 1986 and has helped many families and individuals over the years seeking mortgage relief.

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The Author…

Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped numerous families and individuals during the previous housing crisis you can feel comfortable that Bill’s experience and expertise is unparalleled in our market. More About Bill

Have A Question?

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Can I receive mortgage forbearance? Is mortgage forbearance available for my situation and how can I get it?

The current coronavirus crisis has caused havoc in many peoples lives. Many people in the US through no fault of their own have fallen onto hard times. However, with the recent CARES Act our government has put in place some temporary measures to help those in need.

The CARES Act

The 2 Trillion Dollar CARES Act was signed into law in March of 2020. The Act was designed to put measures in place to help those in financial need due to the Covid-19 crisis. Under the CARES Act homeowners needing mortgage relief, may be able to seek and get assistance. Those that qualify, may be able to defer their mortgage payments for up to a year without penalties of fees.

Forbearance is not a forgiveness of debt. You will still own the money and have to pay it back!

Please understand, forbearance does not mean you can stop making your mortgage payments without consequence. And, it is also important to note, not all loans are covered and the relief may not kick in right away!

Seeking Forbearance – Where to Start

Contact Your Loan Servicer

Concerned Couple about Mortgage Forbearance

When seeking forbearance your first step will be to contact your loan servicer. Keep in mind that only federally backed Government Loans are covered. These would include loans owned, secured or guaranteed by a variety of government agencies. Agencies like Fannie Mae, Freddie Mac, HUD, VA and the Department of Agriculture.

When you contact your loan servicer they will know what entity is behind your mortgage. And they will be able to quickly tell you if your loan will qualify for forbearance under the CARES Act. However, according to the Consumer Financial Protection Bureau’s website, even if your loan is not covered your loan servicer or state may have other options!

Make sure you have your loan number handy when you call.

Have paper and pen to take good notes, and be patient. Wait times on hold could be long! These are not normal circumstances.

Important Questions To Ask Your Loan Servicer

What are my options to stop or suspend my mortgage payments under the CARES Act?
Are their other options such as a Loan Modification, Forbearance or Refinancing that could help me?
Can you waive my late fees and penalties?
How will this affect my credit?

Your Forbearance Agreement

Once you are offered forbearance you will have a new set of terms and guidelines affecting your mortgage. Make sure you understand the fine print and ask plenty of questions. You forbearance agreement will be deferring some or all of your payments for a set period of time. It’s important for you to fully understand this new agreement with your lender, or you may create a new problem down the line.

Other Options

When people encounter financial hardships, the solutions are typically not a one-size-fits-all! Over the years we have helped numerous folks that have encountered financial hardship in may different ways. Below is a list of some of the options that can work to help folks in a variety of situations.

Forbearance
Refinancing
A Short Sale
A Normal Sale
Deed In Lieu Of Foreclosure

While each of these options may not be the perfect solution for everyone, they are options none the less. Each will have a benefit and an a consequence that should be throughly investigated before moving forward. Protecting your financial future should be the goal. It took many people a long time to recover from the 2008 housing crisis and you’ll want to avoid that if at all possible.

If you have questions about your situation, call Bill Byrd at 843-972-7670. Since 1986 Bill has been helping folks navigate challenging situations in real estate. Bill has the resources and connections to make sure you receive the right guidance for any challenge you face in real estate.