Mortgage Relief and Forbearance FAQ
In the wake of the COVID-19 pandemic, we’ve continued to receive questions about mortgage relief options and the forbearance. We want you to know that we’re here to help. The following are our answers to some of the most common questions:
Q: If I Can’t Pay My Mortgage Because Of The COVID-19 Pandemic, What Should I Do?
A: If you anticipate that COVID-19 will impact your ability to pay your mortgage, you need to contact your mortgage servicer ASAP to determine what options may be available to you. Remember, your loan may have been sold since you got it, so the best place to find the right phone number or email address is on your most recent mortgage statement. Be sure to keep this statement handy, as you’ll need to provide your loan number and other information relevant to your account. Contact your provider as soon as you anticipate a problem to avoid any late payment fees or charges. Plus, your lender will appreciate your willingness to make arrangements rather than fall behind – it demonstrates your goodwill and intention to honor your commitment.
Q: What Is Forbearance and Is It The Same Thing As Payment Forgiveness?
A: This is an incredibly important distinction. Forbearance is the temporary suspension or reduction of your monthly mortgage payment for a set period of time, though this period will vary lender to lender. During the forbearance period, your payments are suspended, and negative credit reporting and late charges will not occur. Forbearance is not the same thing as forgiveness or the elimination of any payments due. At the end of your forbearance period, your delayed payments including interest will be due. If you’re experiencing a financial hardship as the result of the COVID-19 health care crisis, forbearance may be a great option to help you get back on track. But remember, once your forbearance is over, any suspended payments will need to be repaid.
Q: Am I Eligible For Forbearance?
Every loan type and lender are different— not to mention rules and regulations change frequently. But in general, forbearance is available in most cases if you are experiencing financial hardship due to the COVID-19 pandemic, such as:
- You are sick and unable to work.
- You have lost your job to the pandemic.
- You can’t work because you are caring for a sick family member.
- Your income has significantly declined due to the pandemic.
The best way to determine your eligibility is to contact your servicer directly.
Q: Can I Submit Payments During The Forbearance Period?
A: Yes, you can submit payments during the forbearance. Full payments will be applied to your loan upon receipt as normal. Partial payments will be applied to your loan and held in a suspense account until funds equivalent for a full payment are received. However, you are not required to make any payments during the forbearance period.
Q: Will I Still Receive Billing Statements During Forbearance?
A: Yes, servicers are required to send you a billing statement every 30 days. But rest assured, you will not be required to make any payments during the plan period and negative credit reporting and late charges will not occur during the duration of the plan.
Q: Will I Receive Letters Advising Me Of The Delinquency Status?
A: Yes, servicers are required to send certain letters to ensure compliance with your investor guidelines. Please refer back to your forbearance letter, which outlines the terms of your forbearance. You will not be required to make any payments during the plan period. Negative credit reporting and late charges will not occur during the duration of the plan.
Q: What Happens At The End Of The Forbearance Period?
A: After your forbearance period, all suspended payments will be due. If paying your suspended payments isn’t financially feasible for you at that time, contact your mortgage servicer to discuss other options, such as paying back the forbearance amount over time or modifying your loan to add the payments to the end of the loan term. By being proactive with your mortgage servicer, you’re giving them the chance to offer you solutions and keep your account and your credit in good standing.