COVID-19 and Mortgage Forbearance

All our lives have changed, some more drastic than others, due to the COVID-19. One of the updates by New York State Governor is that mortgage companies will suspend monthly mortgage payments. What does this means? I went to my mortgage website and here is their take. They call it forbearance, which is a temporary suspension of your monthly mortgage payment. So for 90 days you don’t have to pay your mortgage but on day 91 all 4 monthly payments are due. You will have to call to opt in the forbearance period. Here is the example they gave:

John’s monthly mortgage payment is $1,000 and is due on March 1. He opts in for a forbearance in March. As a result, the forbearance period will run from March through May. At the end of the forbearance period, John will owe a total of $4,000 on June 1 - $3000 for March through May, plus his June payment of $1000.

There will be no negative credit reporting and no late charges during the forbearance period. Based on the news foreclosure process will be suspended during this period. You will still receive monthly statement and letter of delinquent status. Automatic draft will be stopped once the forbearance period begins. If you don’t have the amount at the end of the forbearance you should contact your mortgage provider for further options.

The bottom line is talk to your mortgage provider at all times.

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