Hello Gene - you're right, it's unlikely a plan but that doesn't mean people shouldn't be informed.  Good information.  

Gene this is good information to share.  While Mortgage Forbearance can provide temporary relief, it is not mortgage forgiveness, and in some cases may even create a bigger burden later.

I am sure like everything else, there will be homeowners who will try to abuse the system, and apply for Mortgage Forbearance even if they do not need to.

Good afternoon Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi I know that this will seen differently for some people and George Souto 's comments indicate that there will certainly think this is forgiveness.

Hopefully, folks won't jump into this without a thorough discussion with a reputable lending professional. What may seem like a godsend could easily turn into a nightmare.  

Great information, Gene. Before anyone decides what to do, the best thing is to contact their lender. Get the facts.

                     Congratulations, You've been featured in the group Bananatude.

There's lots of good imformation here, Gene. Thank you for posting, and conratulations on your featured post!

Excellent information. We’ve been trying to educate our sphere. Before you dive in, make sure you need it, and make sure you know what it looks like on the other side. Too much unknown right now.

Excellent illustration about forbearance, especially to get it in writing. Best if possible to add forbearance on the end of the mortgage if the lender will approve.

Excellent information Gene and I agree with every panel above.  Thanks for sharing. 

It is important to understand, that though payments are moved" to another time, typically the end of the load by extending the final maturity date... The interest on the loan CONTINUES to compound and is added to the principle balance during that entire period. So people should use extreme caution doing a forbearance; for some people a sale might be a better option, especially as we are entering a declining market.

Simple Example:

• Current Loan Balance $100,000
• Normal Monthly payment $1,000
• Payment includes Principle Reduction $100 and Interest Payment of $900.

Three months forbearance would result in INCREASING the loan balance by $2,700 to a new total of $102,700. Oh, and every month that amount will compound from the unpaid interest, even higher.

So making a payment arrangment, depending on the loan balance and time of forbearance, can cost many thousand of dollars in lost equity.

Great blog and timely information. Hopefully this will beover soon and not to many people will have to ude this. Stay safe

Gene what a great informative post and I tend to agree with our friend George Souto  the unforeseen consequences that might come up is a bit disconcerting, in the mean time it is a great way to save your home for now...Endre

Is a perfectly good thing to think about and this time of financial strain. Thanks for posting and good luck to everyone.

Endre Barath, Jr. I couldn’t agree more and I just hope it helps anybody who needs help right now. Sending good vibes to you and yours.

So important people know what they are doing and what the consequences may be good bad and or ugly!  We rely on the knowledge you and George and good lenders provide us for our clients. 

If you can make your payments PAY  If you are in trouble read this and work with a lender of high caliber such as yourself!

Good morning, Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi there are many misconceptions about this topic..... you've set everyone who reads this on the right path....

What a great post, Gene, explaining this complicated issue that many people don't truly understand. Thanks for doing this. I'll be sharing with people who need the information.

Very clear and well laid out explanation of what and how and where of forbearance.

thanks Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi  very clear and precise info.  Also shout out to Richard V. Foster, Esq. for more consideration:  

"three months forbearance would result in INCREASING the loan balance by $2,700 to a new total of $102,700. Oh, and every month that amount will compound from the unpaid interest, even higher.

So making a payment arrangment, depending on the loan balance and time of forbearance, can cost many thousand of dollars in lost equity."

You mention credit scores several times. Does this forebearance show up on your credit negatively?

Great post Gene! Early on it seemed that there was some confusion between forbearance and deferred payments where some were saying, "yeah, that's where they put the payments at the end of your mortgage." Nice to have clarity to share the proper info.

Thank you for this, Gene. it is very timely and informative, as usual. (Borrowing).

Great to have all of this in one place, there is a ton of misinformation out there and a lot of forbearance options may not help the person in question. 

Hey Gene, consider writing a one on the difference between deferment and forbearance. Thanks also for sharing my posts along the way. You are priceless Sir. Thanks

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi    Very valuable report about mortgage forbearance.

Great Post with lots of good information that I can share.  I have had some clients call me expressing some fear about upcoming mortgage payments.  I try to let them know that there are "No Free Lunches" and that these payments are not forgiven or forgotten.

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi 
My concern is that some/many people may panic and jump for help too soon. Yes, it buys time and a premium.  

I "inquired" with my lender at the onset of the Pandemic. I made it clear when I called that I am a RE Broker and I am asking for general information. The next thing I know I received a loss mitigation package and my account was locked out.  I could not make a payment.  I was not happy about that.  I could not reach the bank due to the high volume of calls. What an order to resolve their error ... an inquiry is NOT A REQUEST.  

BEWARE, HOMEOWNERS! 

I question if many will ever have the money to catch up ? Have they considered adding the missed payments to the loan balance 

Thanks for sharing!

If you are one of those Americans that have been negatively impacted financially, either via loss of employment/work hours, income loss, other financial stresses, or health considerations due to COVID-19 ... you are definitely looking for a dose of good news.  And thankfully, there is some to share.

Gene:

As always you have provide excellent education and advice in an easy to understand format. Anyone who might need a forbearance now should read this.

Jeff

I was just looking at the latest updates and this is fine with me as long as he gets people out of any trouble. lol possibly.

Jeff Dowler, CRS Jeff, I wouldn’t expect anything less and I hope you’re doing well and staying safe in this crazy crazy time

GREAT explanation of lall aspects relating to a mortgage in the current housing climate for those that really need answers!  Thanks as always.