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Forbearance Questions

When Calling Loan Servicers ~ Make sure you are asking the right questions when asking for a forbearance.

  • When do you have to pay it back?
  • What happens if you can’t pay it back in 90 days?
  • Do they report negatively to the bureaus?
  • Will this prevent you from refinancing?
  • If you do a loan modification will it affect their interest rate?

Let’s set the record straight first—there’s no such thing as “skipping” mortgage payments.

The recently announced mortgage payment relief through the CARES Act provides mortgage forbearance for those who have lost a job or are suffering financial hardship due to the coronavirus pandemic and whose loan is federally owned or backed by a federal agency.

Reach out using the contact info on your loan statement to determine what help may be available to you. It’s vital that you discuss the options based on your situation. If assistance is available, be sure to get your agreement in writing.

Please Remember:

A forbearance is not a holiday. A forbearance allows you to pause or reduce your payments for a limited time. Deferred payments may be due in full at the end of the forbearance period. Sometimes, these payments may be stretched over a short time period or perhaps added to the end of your loan term.

If you have an escrow account, deferring payments will mean you will also have to make up the shortage as part of your repayment plan.

The CARES Act intends to prevent negative impacts to your credit if you undertake a forbearance for your government backed loan. However, changes to reporting between servicers and credit agencies may not occur seamlessly. If you do pursue a forbearance, you will need to monitor your credit report to catch and report any errors.

Think it through. A forbearance is not a forgiveness. It does not eliminate payments; it only delays them. If you have emergency savings, available lines of credit or other means to pay, these may be better options to get you through these difficult times.