CORPUS CHRISTI, Texas — A local attorney talks about mortgage forbearance, and what it means to homeowners struggling to pay their mortgage during the pandemic.
We asked Joel Gonzalez what mortgage forbearance means, and what it means to homeowners.
"They don’t have to make their mortgage payments. Their mortgage payments are deferred. They don’t run the risk of being foreclosed. They don’t run the risk of losing their home."
Gonzalez is a local attorney who handles bankruptcy, debt, and mortgage forbearance cases.
"I see the extremes in my line of work. I see when people are getting ready to lose their home."
And that’s where mortgage forbearance helps.
It was part of the CARES Act of March 2020, for the purpose of providing economic relief to Americans struggling financially as a result of shutdowns and job loss due to the COVID-19 pandemic.
A homeowner can request forbearance from their lender twice a year, in six month increments. Of course, you’re still responsible for paying the unpaid mortgage.
And here’s some good news. The Federal Housing Finance Authority recently extended the deadline for mortgage forbearance for FHA and VA mortgages an extra month, to March 31.
Gonzalez strongly recommends homeowners still struggling financially to make the tough decisions now, before possibly losing their homes.
"At some point it’s not realistic to continue to kick the can down the road because the problem gets bigger and bigger."
You do have options. According to Gonzalez and the Consumer Financial Protection Bureau, you can do a re-payment plan where the unpaid amount is spread over a period of time. You can also defer the amount owed to the end of the loan term, re-pay the entire unpaid amount at end of forbearance in a re-instatement, or modify the terms of the original mortgage, which may end up costing you more over the life of the loan.
According to the CARES Act, mortgage accounts in forbearance as a result of COVID-19 do not have to be repaid in a lump sum, and cannot be reported negatively to the credit bureaus by lenders.