Here’s what you need to help your clients understand about forbearance.
The C.A.R.E.S Act provides all homeowners who have lost their jobs due to COVID-19 with the ability to apply for forbearance. In short, forbearance is an agreement between a borrower and their mortgage provider that states the borrower will reduce or delay your mortgage payments for up to 12 months.
To pay back the reduced or delayed payments, the mortgage provider could add them back to each of your monthly payments until the deficit is covered, or it could be added to the back end of the loan, extending the loan period.
“Your client will need to explain their hardship and provide paperwork showing that they’ve lost income, but overall, it’s a simple process.”
If one of your clients is applying for forbearance, advise them to contact their mortgage company, who should already have information packets, and help guide them through the process.
One great thing is that the C.A.R.E.S Act states that it won’t affect your clients’ credit scores, but I’d recommend that your clients start checking their credit as soon as they get their forbearance agreement. Right now, through Equifax, Experian, and TransUnion, you can get a free annual credit report, or you can also visit www.AnnualCreditReport.com to sign up for a weekly credit report up until April 2021.
For more useful information to pass on to your clients regarding forbearance, click here.
If you have any questions, don’t hesitate to reach out to me. I’d love to help you.