With so many Americans losing their jobs, the federal government put a temporary stop to foreclosures. Mortgage companies started to offer forbearance to their borrowers, giving them some short term relief. But forbearance is a double edge sword.
Forbearance does grant some temporary relief. During the forbearance period, you don’t have to pay your mortgage and you don’t risk going into foreclosure or accumulating late fees and legal fees. However, at the end of the forbearance period, you are expected to pay all of your past-due payments. So if you have been in forbearance for six months, and your regular mortgage payments are $2,000, you now have to pay $12,000 to avoid going into foreclosure.
If you find yourself nearing the end of your forbearance period with no way to pay that amount, the first thing you should do is contact your mortgage company to discuss your options. Most mortgage companies don’t want to foreclose, so they will work with you if you don’t wait too long. They will sometimes allow you to do a loan modification, which will adjust your monthly payments and may adjust your loan term.
If the bank doesn’t want to work with you, you still have options. Fill out our form for a no-obligation consultation to find the best option(s) for you.