As the forbearance period comes to an end, mortgage lenders have started bracing up for defaults. While the ongoing forbearance programs are primarily designed to relieve homeowners of the burden of mortgage payments during COVID-19, it’s clear that not much has improved in the economy as millions of Americans are still without jobs.
If you expect to still struggle to meet your payments once the protection ends, it’s best to seek expert assistance to know your options. The Law Offices of Michael Alan Siddons, Esquire is pleased to provide debt relief service that’s tailored to your situation and needs.
Forbearance has been an option for homeowners facing financial hardship for a long time, but its availability has substantially expanded since the COVID-19 outbreak. Although the mortgage forbearance program under the CARES Act applies only to loans backed by Fannie Mae and Freddie Mac, or those issues by the VA and FHA loans, many private lenders have also voluntarily extended forbearance protection.
Unfortunately, forbearance is not loan forgiveness and you will be required to pay the principal and interest that you didn’t pay during your forbearance period. The provision is only designed to allow you to temporarily stop servicing your monthly mortgage bills over a specific period of time.
At the end of a forbearance period, you’re expected to make up the missed balance. But rather than balloon payments, some mortgage lenders allow you to tack missed payments onto the end of your debt. Either way, your repayment plan forms a big part of coming out of forbearance and remaining in your home.
What Happens If You Cannot Resume Payment When the Forbearance Period Ends?
Defaulters face a number of unpleasant situations at the end of the forbearance period, some of which include the risk of foreclosure or eviction. In addition, failure to resume your payment after forbearance can have a significant negative impact on your credit and affect your future borrowing.
What Can You Do To Prevent Foreclosure or Eviction After Forbearance?
The strongest option for you to continue to stay in your house after forbearance is to resume your payment immediately. But if you can’t, you may be qualified for a forbearance extension. You’re likely going to qualify for at least one extension if you’re in your first forbearance.
If you need clarification on your options to retain ownership of your house after forbearance, you can speak to an expert at any of the Law Offices of Michael Alan Siddons, Esquire or call 610-255-7500.