When Loan Forbearance Ends, what happens next? Know your options before it ends! From loan modifications to short sales, what are your options when the loan forbearance you signed up for ends?

Let's talk about loan forbearance and how it affects you.

I'm Sandy Curtis with Berkshire Hathaway, Bowen Realty, your real estate resource. And I would like to talk about loan forbearance today and how it is going to affect you with the months coming. Many of you have taken advantage of the low forbearance program that was offered to you by your lender. Government backed program loans are extended until December 31st. So this is more of an informational video on how you should proceed once your forbearance program has ended. A lot of people don't realize the loan forbearance program when it ends is due in a lump some of those amount of months and what your mortgage payment would have been. But most of us do not have that kind of money sitting in the bank that we can just hand over to them. There is a reason that you took advantage of the forbearance program, and it's usually because you didn't have the funds to pay the mortgage to begin with whether that be due to a job loss or business closing, you should be contacted by your lender within 30 days of your program expiring

Because at that point, you either need to bring the account up today with all the amounts paid in full, or you need to accept one of the offers that they are able to offer you. Now, what kind of offers are you talking about? Well, usually, and more than likely it is going to be a loan modification. The ultimate goal when you are at the end of the forbearance is to qualify for the loan modification where they add the months that you missed to the end of the loan. So you would have your loan for 30 years from the day you bought it plus those extra months. So if you missed your payments for six months and you were in the forbearance program for six months, then it would tack six months. At the end of the loan. Other loan modifications may just be a reduction in the amount you pay every month, or it may be a payment program to help you bring the account back up to good standing. 

Unfortunately, if you do not qualify or accept any of these offers, it's more than likely that they aren't going to pursue a foreclosure on your property. Which is why I am bringing it to your attention now, so that you can be ahead of the game and know what your options are and you can move forward. Where it gets sticky is if you don't qualify for the loan modification that they offer you. And the reason you may not qualify can be a bunch of different options, but the main one is going to be job loss. A lot of us have lost our jobs over this period due to the COVID-19. A lot of restaurants have closed. A lot of people are at home, just wondering what's going to happen. When you fill out for the loan modification, you have to give them what your income is and what your debts are. 

So if you do not qualify in their numbers to keep the house under their loan modification, they more than likely will reject you. I recommend that everyone speak to a counselor that knows what they're talking about. When it comes to loan modifications and the forbearance program, you get to put a link below that is going to take you to the HUD website that you can put in your state and find your nearby agencies. I recommend that you speak to them. They will know what the options are. They also know what needs to be done to get you from point a to point B. The other options, if you do not qualify for the loan modification, would of course be selling the property. Of course you can only do that if you have equity in the home. Otherwise you have to look at doing a short sale. The benefits for doing a short sale I have on other videos, I'm going to leave the link up here, go ahead and watch the short-sale videos for a little bit more information on how they work. But basically you're asking your lender to take less for the house than what is owed on it. With all of that I said, I unfortunately do predict that we are going to have more short sales next year, due to the financial difficulty that a lot of people are going through. So if you or anyone, you know, is going through this and make sure that you reach out to a counselor who is knowledgeable about what it is you're discussing and a realtor who is familiar with the short sale process and has completed short sales in the past for sellers. Don't forget if you like the content in my videos, I would love it. If you could subscribe and ring that bell. So you're notified when my weekly video comes out and of course like the video.

HUD Counseling agencies: https://apps.hud.gov/offices/hsg/sfh/...

 

CARES Forebearance Fact Sheet: https://www.hud.gov/sites/dfiles/SFH/...

 

Consumers Financial Protection Bureau Guide to Success: https://files.consumerfinance.gov/f/d...