Mortgage Forbearance Update #4

How are lenders/servicers handling forbearances as of June 2020?

As the COVID-19 pandemic continues to create havoc in our economy, many homeowners are opting to seek relief through mortgage forbearances offers by the lender/servicer. Here is a brief update on what’s happening now as people evaluate their options.

Some have sought out short term forbearances, 90 days, and now they are having to face the reality of having to deal with post-forbearance or ask for extensions. Those that are calling their lender/servicer for extensions will find that most of them will be glad to accommodate you. If you are back to work and able to make your payments, as usual, lenders will gladly set you up with plans to bring the amount in arrears current, including just tacking on the past due balance to the principal amount of your loan.

So far, homeowners have not had to default on their loans as the stimulus packages and the plans made available by the different lenders are cushioning the economic impact of the pandemic. Let’s hope that as we re-open business more and more, we can back to normal soon.

Things to keep in mind as you decide whether to take advantage of the forbearance plans offered by your lender/servicer:

If you have the ability to pay, it would serve you well to just keep paying. Forbearance plans do show up on your credit, and not in a positive way. If you can avoid that, it may be in your best interest.
It would be unwise to go on forbearance and allocate the mortgage payment for purchases such as cars, RVs, vacations etc. Every situation is different of course but as a general rule, this is not financially prudent.
Beware if you have a car loan or other large consumer loans. If the lender offers you a deferment of payments, just know ALL of this goes on your credit. BE INFORMED!

As this pandemic works its way through the economy, you may have questions about Real Estate or Mortgages. My team and I are here to help you with any questions. Pleas reach out at any time.