During these difficult times, many homeowners in South Florida and across the country are having trouble making their mortgage payments, causing fear of losing their homes. Since March 2020, millions of homeowners have received “forbearance” under the CARES Act, allowing them to temporarily pause or reduce their mortgage payments. Relief programs have been extended into 2021, which is helping many save their homes.
So what exactly is Mortgage Forbearance?
Forbearance occurs when your mortgage lender allows you to pause or reduce your mortgage payments for a limited time while you get back on your feet. For most loans, there will be no additional fees, penalties, or additional interest (beyond the regularly scheduled amounts) added to your loan payment.
However, Forbearance does not mean your payments are forgiven or erased. You are still obligated to repay all the outstanding payments that were skipped, which may be repaid over time or when you refinance or at the latest, when you sell your home. Before the end of the forbearance, your servicer will contact you about how to repay the missed payments.
Who is eligible?
You may have a right to a COVID hardship forbearance if you experience a financial hardship due to the coronavirus pandemic AND you have a federally backed mortgage (HUD/FHA, VA, USDA, Fannie Mae, Freddie Mac).
For mortgages not federally backed, servicers may offer similar forbearance options.
When is the deadline for applying?
If your loan is backed by HUD/FHA, USDA, or VA, the deadline for requesting an initial forbearance is June 30, 2021. If your loan is backed by Fannie Mae or Freddie Mac, there is not currently a deadline for requesting an initial forbearance.
Initial forbearances typically last 3-6 months, but can be extended up to 12-18 months depending on circumstances. It’s important to know your options as the financial impact of the pandemic continues and changes to relief and stimulus are ongoing.
The Law Office of Donna Hearne-Gousse P.A. provides representation in all areas of real estate law, including loan modifications and short sales. If you find that you are in need of assistance during these times, our office can help you navigate through the process during these volatile times.
The Law Office of Donna Hearne-Gousse