When Texas and Florida, along with several other states along the eastern seaboard of the United States, were hit by Hurricane Harvey and Hurricane Irma, many mortgage companies offered their borrowers who had been affected by these storms participation in a forbearance program. A forbearance program is where your mortgage company agrees to suspend your mortgage payments for a set period of time. Forbearance programs are usually good for borrowers who are going through a short-term financial situation. The forbearance of mortgage payments is meant to allow the borrower the time they need to get back on their feet and then recommence their regular mortgage payments. The idea behind the forbearance programs after the hurricanes was to allow homeowners time to repair or rebuild their homes that had been damaged by the storms.
Unfortunately, not all forbearance programs have reached their goal. What I have come to learn through the last several months as forbearance programs are coming to an end, is that some of these programs require the borrower to bring their mortgages current at the end of their forbearance period. This means that borrowers must make all missed mortgage payments at one time when their program ends. The issue that many borrowers who have chosen to take advantage of one of these programs is that they were not aware that they would have to make all of the payments at the end of the designated time period. By the time they learned they would be expected to pay their mortgage company all of the payments that were deferred through the forbearance program, it is far too late for them to prepare for such a large payment at one time. This has put many borrowers between a rock and hard place, because they are unable to bring their mortgages current. Continue reading →