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Forbearance Is Not Forgiveness (Guest Post by Dan L’Altrella)

Let’s do some “Mortgage Forbearance Math.”

Mom and Dad have a mortgage.

It’s currently $1,000.00 per month.

Dad gets laid off, calls the Servicer, and asks for a Forbearance.

In one phone call, he gets 6 months “off” from paying.

Seven months later, Dad is finally back to work, and hasn’t been able to save any money during the Forbearance.

The Forbearance is lifted and the Servicer says,

“That will be $6,000 + $1,000, which is now due” ($7,000 total).

Dad almost passes out and says, “WHY??”

Servicer: “That’s the 6 months of Forbearance plus the current month.”

Dad: “I can’t do that, can we work something out?”

Servicer: “Sure, we will spread out the $6,000 over 12 months.”

Dad: “Phew….ok, good. What will that look like?”

Servicer: That will be $1,500 a month for the next 12 months.”

Dad: ” OMG!!! I can’t afford that.”

Servicer: “Sorry…..”

Dad: “Can I refinance?”

Servicer: “No because the loan went into Forebearance.”

Dad: “What can I do? Am I going to be homeless?”

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This is one example of forbearance. There are others depending on the Servicer (another example: some will allow you to add the unpaid payments to the loan resulting in more interest, longer payments, etc).

In a nutshell: Forbearance is not Forgiveness.

We need to put this message out there to protect our fellow citizens.

Please understand the seriousness of this, and if you still have questions, you know I am always here for you.

My team will help guide you in the proper direction. We know these are very hard times, and understand there is panic in uncertainty.

Please just hang in there. This too, shall pass.

Dan L’Altrella
Local Mortgage Expert 
NMLS# 133211 

Fairway Independent Mortgage Corporation
80 Huntington Street
Shelton, CT 06484

Direct: 203-521-2905
Office: 203-712-1177