Many changes have happened thanks to the Covid-19 health crisis. Unemployment levels went up and many people found that it is hard to make their mortgage payments. Lenders offered different forbearance programs to help their customers out and mortgage delinquencies actually fell during this time. If you have been using this program through Covid-19, you may wonder what will happen when the program ends. 

What is Mortgage Forbearance 

When you find it impossible to make payments on the mortgage, your lender may decide to offer some relief and give you a break on the payments in the form of forbearance. The details of how this works will vary depending on the lender. Many federally-backed loans expanded these programs since so many people faced economic hardships due to the global pandemic. Some private lenders offered these programs as well. 

Any borrowers who took advantage of this plan were able to not worry about the payments during the pandemic. However, they will have to take care of their missed payments once the program is done. The way they take care of these payments will depend on which program they use. 

How are My Missed Payments Handled?

Your lender will get to decide how the missed payments will be handled. There are different ways that the lender can work with this. Some of the most common options include:

Repayment plans: When the forbearance ends, the borrower can pay a little extra on the mortgage payment until the amount that they missed is paid off. 

Partial claim or deferral: This will allow the borrower to go through their normal mortgage payments when the time ends. Missed payments are added to the end of the loan. The lender may use a subordinate lien and they get the missing payments when you refinance, finish the mortgage, or sell the property. 

Modifications: Some borrowers may get a modification to the loan to help lower the monthly payments. The lender will add the total of the missed payments to the loan, which extends the loan. 

Reinstatements: This plan will have the borrower pay their missed payments all at once when the time comes. 

There are some people who will use forbearance to help during the pandemic. When the forbearance plan is done, they will not see an improvement in their financial health. If they are not able to comply with the plan they started with, then they may need to try other methods. 

Working with Your Mortgage Company

You should always discuss with your mortgage lender what you can do when it comes to paying back your forbearance amount if you find it impossible to pay the amount that you should when the payment plan comes due. They may be able to offer you some assistance to help with the payment plans and get the amount paid off when you need them. It is better to see what options are available rather than ignore the problem and have the problem get worse. 

If you have dealt with some difficulties during the covid-19 pandemic and you are not able to pay off your mortgage payments each month due to losing your job or seeing a reduction in your hours, many lending companies have offered forbearance plans to help you out. If you decide to do this to help you get out of trouble during the pandemic and until things get started back up again, then you need to read all the terms so you understand what is going on and what will happen when the plan ends. This will help you to get organized and prepared to protect your financial freedom. 


If you are in a financial mess and need help, contact Moseman Law today. A personalized consultation with Attorney Heather Moseman, a Cleveland area bankruptcy lawyer, will determine which chapter of bankruptcy will best solve your financial problems. Schedule your appointment today!