Understanding Mortgage Forbearance
I have been getting a lot of questions about mortgages, and specifically, mortgage forbearance. I want to define what forbearance is - forbearance is not forgiveness and borrowers will have to pay the money back. The program should be for those that truly need it...I cannot stress that enough. This is for the good of the country and the good of the housing market.
The government has allocated a stimulus package called the CARES Act that allows borrowers of government-backed mortgages to receive forbearance for up to 12 months. The bank or servicer who owns the mortgage will dictate how forbearance is allocated.
There are three ways forbearance can be received:
1. A borrower may receive forbearance for a specific amount of time. During that time, the mortgage payment will not be late or accrue interest, but when the forbearance period ends, the entire backed payment will be due in one lump sum.
2. Forbearance may be received in the form of a secondary mortgage tacked on to the back of the original mortgage.
3. A lender or servicer will issue forbearance for a specific amount of time. When it comes time for repayment, a portion of the owed amount will be added to the monthly mortgage payment until paid in full.
If you would like more information on forbearance and what your options are, please reach out - (949) 212-1433.