As they grappled with the frightening pandemic, millions of homeowners took due advantage of federal mortgage-forbearance legislation, relieving them of home mortgage payments for up to twelve months. With the pandemic's onset now more than twelve months ago, the Federal Housing Finance Agency recently extended forbearance relief for nearly three million homeowners for an additional three months, making up to fifteen months of not having to pay the home mortgage.
Extended mortgage-loan forbearance relief is wonderful. For many homeowners, forbearance relief has been necessary to save their homes from foreclosure. And a few more months of that relief will surely make the difference to thousands of families hoping to keep their homes. But what comes next after that forbearance relief finally ends, as it is sure someday to do, and probably quite soon?
Homeowners facing the inevitable end of mortgage forbearance relief have several good options. The sobering news is that homeowners in forbearance must eventually pay the mortgage principal owed and interest accruing during forbearance. Forbearance isn't Easy Street. Forbearance costs homeowners in accumulating interest. Yet, the good news in the legislative detail, as confirmed by a federal agency consumer website, is that lenders generally cannot require a homeowner to pay the total forbearance back as a single lump sum. Instead, you should have these options:
- add a part of your forbearance balance to your resumed monthly payments until you have paid that balance off;
- if you cannot afford to increase your monthly payments to reduce the forbearance balance, then wait to pay that balance off in monthly payments that begin at the end of the mortgage loan;
- if you qualify, then grant the lender a junior lien for the forbearance balance, to pay off when you refinance or sell your home; or
- pay the forbearance balance off in whole or part when you have saved enough money or receive a gift, inheritance, or loan.
At All Costs, Avoid Foreclosure
The one option homeowners don't want to face and rarely benefit from facing is foreclosure. If you need assistance confirming or negotiating mortgage forbearance terms with your lender, or if you face foreclosure, then retain the industry-focused, relationship-driven real-estate lawyer Melvin Monachan. Melvin Monachan helps residential and commercial clients in New York and New Jersey avoid foreclosure while also handling real estate closings. Trust Melvin Monachan when you need to address your mortgage forbearance to avoid foreclosure. Call (347) 389-1682 or go online for an appointment at the Law Offices of Melvin Monachan, PLLC.