Keep in mind that forbearance does not mean forgiveness of debt. This is not a modification. This is not debt forgiveness. This is not reducing the balance. In fact they can charge you fees. In fact they can create a balloon due. In fact they can foreclose when this is lifted.
Only government loans guaranteed by Fannie Mae, Freddie Mac, USDA, and FHA will even think about offering forbearance. If you already are rolling late payments Chase for example has sent you to the punishment unit: Specialized Loan Servicing. All the big banks have their unit they spin off mortgage loans where the borrower is difficult, slow payment record, and they police like politsiya.
The owner, investor or trustee who owns the note has a say in how or what kind of delayed payment agreement they might offer. One can assume there will be tiered deals depending on the amount of equity in your real estate, the payment record, the location of subject property and how hard the economy is hit in the subject property surrounds.
It's going to be difficult to track what a servicer offers to Borrowers and I assume none of it will be a level playing field, and this we won't see until 2023. They may offer borrowers to pay half for three months, then double down for three. They may offer borrowers to pay some reduced amount then it will be all due and payable in a year. Borrowers must understand they need to have an exit strategy ready at the date of the balloon or acceleration.
This pandemic may continue for more than a year. Finding a replacement job at the same pay scale may not be realistic in six months or a year. Renting a room to increase your monthly nut may not be a healthy choice as this brings into your home more opportunities for the virus to be carried inside. Values will certainly decrease, the equity in the home may not exist in a year. Location weighs heavy on the decision making.
As we saw in the crash of 2008 and 1990 property values came back for single family in coastal and desirable employment areas in two years but not so for condominiums and inland. Each borrower situation is unique and not easy to make the choice. If you intend to call your servicer
(Ocwen MR Cooper or the bank...) you must say the word coronavirus and ask for a forbearance package. Once you receive it in writing get some advice as to the best course of action.
I keep you all in my prayers.
If you haven't refinanced and gotten rate down to the 3's - let's talk.
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