What to Do After You Receive Forbearance
Taken from CFPB
While you’re in the forbearance period, or working under another mortgage relief option, there are a number of things to do to continue to protect yourself.
What to do immediately This advice applies to both a CARES Act forbearance and other mortgage relief that you might receive.
Keep written documentation on hand. You want to make sure that you have this documentation available in case there are any errors on your monthly mortgage statements to ensure that your statement reflects the assistance provided.
Pay attention to your monthly mortgage statement. Continue monitoring your monthly mortgage statements to make sure you don’t see any errors.
Stop or change auto-payments for your mortgage. If you are having your mortgage payment deducted automatically from your bank account, make sure you make any necessary adjustment to avoid any fees or charges.
Keep an eye on your credit. It’s a good idea to routinely check your credit reports in order to make sure there are no errors or inaccuracies. You can check them weekly for free through April 2021. Servicers may report that your account is in forbearance. However, if you were otherwise current on your account and have received relief as defined by the CARES Act (referred to as an “accommodation” under the Act), your servicer or creditor is required to report your account as current. If you stop making mortgage payments without a forbearance agreement, the servicer will report this information to the credit reporting companies, and it can have a lasting negative impact on your credit history. If an error has been made, however, you can work to dispute it. Get more information about CARES Act requirements and prohibitions regarding credit reporting and how to protect your credit during the coronavirus pandemic.
Once your income is restored, contact your servicer and resume your payments. With forbearance, you still owe the payments that you missed, but fewer missed payments mean you’ll owe less down the road.
If you still face financial hardship, you can request a forbearance extension. Under the CARES Act, if you have a federally or GSE-backed mortgage, you also can request and obtain an extension of the forbearance for up to an additional 180 days.
If you’re continuing to receive some income that turns out to be more than you need for your bills and expenses (including anything you keep paying on your mortgage), consider putting the extra money away so you can use it to pay off what’s needed later. If you can save any money now, it’ll be helpful when payments are due later.
Your property taxes and insurance should continue to be paid by your servicer if your mortgage has an escrow account, but you may want to confirm that with your servicer. If your mortgage does not have an escrow account, you will be responsible for paying property taxes and insurance payments. You are responsible for making any HOA and condo fees during forbearance.
How to repay your forbearance Before your forbearance period ends, you will have to make arrangements with your servicer to repay any amount suspended or paused.
Remember, under the CARES Act, if you have a federally or GSE-backed mortgage, you also can request and obtain an extension of the forbearance for up to an additional 180 days.
The method of repayment varies depending on your loan and the protection provided. Not all borrowers will be eligible for all options. Ask your servicer how these programs work and what you can expect in terms of repaying these amounts.
Just as forbearance may differ between the federally backed agencies or entities, so does the repayment of the forbearances.
Please check back for updated information as well as check with your loan servicer and the website of the agency or entity that owns or guarantees your loan. The following information provides some of the options to repay your forbearance. If you have an FHA, VA, or USDA loan, check out the forbearance factsheet for borrowers.
Fannie Mae & Freddie Mac loans Homeowners with mortgages owned or guaranteed by Fannie Mae or Freddie Mac may be eligible for different repayment options following your forbearance. Fannie Mae and Freddie Mac do not require a lump sum payment at the end of the forbearance.
If you are unable to repay your missed payments all at once and can afford to pay a higher monthly mortgage payment for a period of time, you may be eligible for a repayment plan which allows you to repay past due amounts over a period of time.
If you can afford to resume your regular monthly mortgage payment you may be eligible for a payment deferral which puts your missed mortgage payments into a payment due at the sale or refinancing of your home, or at the end of the loan.
If you have a sustained reduction in income and are unable to afford your regular monthly mortgage payment, you may be eligible for a loan modification which changes the terms of your loan to enable an affordable payment.
Servicers will reach out to you about 30 days before your forbearance plan is scheduled to end to determine which assistance program is best for you at that time. Work with your servicer to determine which option you are eligible for. FHA/HUD loans FHA does not require lump sum repayment at the end of the forbearance. Homeowners on special COVID-19 Forbearance will be assessed by their servicer first for eligibility for the COVID-19 home retention option no later than at the end of the forbearance period.
The COVID-19 home retention option, called the COVID-19 Standalone Partial Claim, places amounts you owe into a junior lien that is repaid when you refinance your mortgage or sell your home or your mortgage otherwise terminates. If you do not qualify for the COVID-19 Standalone Partial Claim, FHA offers other tools to help you repay the missed payments over time.
USDA Rural Housing Service Guaranteed Loan Mortgages USDA Rural Housing Service does not require a lump sum payment at the end of the forbearance.
If you can resume making regular payments your servicer or lender should either offer an affordable repayment plan or term extension to defer any missed payments to the end of the loan. If you are unable to resume making regular payments, your servicer or lender should evaluate you for all available loss mitigation options.
Upon completion of the forbearance, the lender shall communicate with the borrower and determine if the borrower is able to resume making regular contractual payments. If so, the lender shall offer the borrower a written re-payment plan to resolve any amount due or, at the borrower’s request, extend the loan term for a period that is at least the length of the forbearance.
Visit USDA Rural Development’s coronavirus website for more information on forbearance for USDA guaranteed loans.
VA loans Servicers of VA loans cannot require borrowers to make a lump sum payment immediately after a borrower exits a CARES Act forbearance.
VA has a suite of loss mitigation options such as repayment plans and loan modification to assist borrowers in repaying payments missed under a CARES Act forbearance. In addition, VA is continuing to evaluate other options to further assist borrowers affected by the novel coronavirus (COVID-19) national emergency.
For additional information, please visit VA’s website where you can find a list of frequently asked CARES Act questions . In addition, you may call (877) 827-3702 to contact a VA Regional Loan Center.
For non-federally backed loans Check with your lender and your loan servicer for the forbearance repayment options that they offer. You may be able to find information about forbearance programs by checking the websites of your lender and servicer for more detailed information. Be sure to inquire about what limitations, options, and fees may apply to repayment of your loan due to the fact that it is not federally-backed.
For all loans If you don’t think that you will be able to resume your mortgage payments at the end of the forbearance period, contact your mortgage servicer right away, before the end of your forbearance period. They might be able to offer you longer term help.
The Homeowner’s Guide to Success explains what to do if you can’t pay your mortgage. Additionally, the Bureau has rules to protect homeowners in the foreclosure process. Towards the end of your forbearance you should receive communication from your servicer about your options and if they need additional information. It is important to work with your servicer to understand the process and what your next steps are.
Are you having trouble with a financial product or service? If you've already tried reaching out to the company and still have an issue, you can submit a complaint. Tell us about your issue—we'll forward it to the company and work to get you a response, generally within 15 days.