Will forbearance hurt my credit score?

By
Mortgage and Lending with Cambria Mortgage NMLS 274132

Many people are struggling these days. Mortgage forbearance (pausing payments) may seem like the answer.

One of the biggest questions people are asking is, will forbearance hurt my credit score?  The answer is both no and yes.

Per the CARE ACT, lenders are not allowed to report any paused (missed) payments as a late payment on the credit report, so technically no, it shouldnt effect your credit score.

BUT, the word forbearance WILL show up as a comment under your mortgage (I've seen it already). Lenders will know, and will be extremely reluctant to lend to you in the near future.

Long standing underwriting guidelines have always required we review a minimum of your last 12 months mortgage payment history, which we normally just see on your credit report. Lenders will likely NOT lend to you until you can prove, document, and verify you've had a normal on time payment history for at least the last 12 months.

I've created a webpage related to how COVID 19 has affected the mortgage and real estate industries. You can read more at https://joemetzler.com/covid19/

 

Cambria Mortgage, Joe Metzler

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YES, the counter top people! Equal Housing Lender. NMLS 274132, 322798. Cambria Mortgage lends in the following states: MN, WI, SD, ND, IA, FL, TX, CO, This is not an offer to lend or to extend credit, nor is this a guaranty of loan approval or commitment to lend. The information here may not be up-to-date and may no longer be accurate. Products and interest rates are subject to change at any time due to changing market conditions. Actual rates available to you may vary based upon a number of factors. Consumers must independently verify the accuracy and currency of available mortgage programs. All loan approvals are subject to the borrower(s) satisfying all underwriting guidelines and loan approval conditions and providing an acceptable property, appraisal and title report. (C) Joe Metzler

 

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Topic:
Lending / Financial
Location:
Minnesota
Groups:
Mortgages
All About Mortgages/Mortgage Networking
The FHA Mortgage Group
Minnesota Real Estate
Investment Property (USA)
Tags:
credit score
credit report
bad credit
forbearance

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Rainmaker
188,250
Raymond Henson, SRES, GRI
eXp Realty of California, Inc. (lic. #01878277) - Elk Grove, CA
Realtor

It would be very unfortunate if the missed payments due to the coronavirus are held against borrowers.  I have family members that have chosen to go that route.  I would not be surprised, though.

Apr 28, 2020 08:45 AM #1
Rainmaker
5,765,634
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

This is timely information to share. Many mortgage borrowers are being impacted.

Apr 28, 2020 08:50 AM #2
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Rainmaker
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Joseph Metzler

Sr Loan Officer
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