“Skipping” Mortgage Payments, Forbearances During COVID-19

“Skipping” Mortgage Payments, Forbearances During COVID-19

Tracy Brown

8 Posts



COVID-19 has adjusted the financial situation of households across the world. If you’ve been keeping up with federal legislation being passed in response to COVID-19 you’ve probably heard phrases like CARES Act or Mortgage Forbearance being thrown around. So, we’re here to tell you 5 things about forbearances and why you should care.


5 Basics of Forbearances

1. What is a forbearance?

  • A plan between a lender, typically a bank, and a borrower, in this case you, when the borrower (you) can’t make the full mortgage payment

2. What does a forbearance do?

  • Reduces or pauses mortgage payments for a certain period of time
  • During this time the lender (bank) agrees NOT to foreclose the property

3. What happens when time is up?

  • The borrower (you) starts making full payments again and pays an additional amount to cover the “skipped” payments, interest and tax

4. What does the CARES Act have to do with forbearances?

  • Due to COVID-19, borrowers with federally backed mortgages can apply for a loan forbearance for up to 180 days plus a 180 day extension
  • The CARES Act changes the credit reporting guidelines so that the forbearance does not hurt your credit score

5. Is there a catch?

  • Lenders get to choose the payback plan. Common plans include:
    • Borrowers payback “skipped” payments in full after the time period is up
    • Borrowers payback the “skipped” payments within 12 months
    • The “skipped” payments are added to the end of your loan which extends your repayment time frame
  • If you are considering forbearance as an option but do not have a federally backed loan your credit score could be affected

Why you Should Care?

  • If you are temporarily unable to make full mortgage payments and don’t want your home to go into foreclosure a forbearance may be an option for you.
  • If your forbearance ends and your financial situation has not changed you could be forced into foreclosure. 

Think You May Need a Mortgage Forbearance?

  • Find out who your lender is
  • Reach out to find out what plans they are offering for people unable to make their mortgage payments in full
    • Ask if you have a federally backed mortgage, the CARES Act may apply to you
    • Ask how “skipped” payments are expected to be paid back

Want to Know More? 

Mortgage Forbearance Agreement

COVID-19 Mortgage Forbearance: What to Know Before you Delay Payment

Guide to Coronavirus Mortgage Relief Options

Posted by K. Brown

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