Forbearance Amid COVID-19

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Photo credit: Alexander-mils

Photo credit: Alexander-mils

As of this week, 3.4 million homeowners filed for forbearance on their mortgage loans amid the Coronavirus often referred to as COVID-19. Borrowers that have filed for employment in the State of California are at 2.7 million this week according to an LA Times article a few days ago. What does this mean for borrowers that may return to work in the coming months and want to refinance or purchase a new home?

Should Your Clients Apply for Forbearance Amid COVID-19?

  • Borrowers who need a reprieve from paying their mortgage amid unemployment, furloughs, and lay-offs can apply to their servicer and lender for forbearance and in order to stay in their home, as a last resort, apply as soon as possible to get their paperwork in for review. Remind borrowers to keep a record or communication log and paper trail to reference.

  • Borrowers that have the resources and means to continue paying their mortgage, should do so. We do not have a pulse yet on how the pandemic will affect credit scores and mortgage history should a lender want the history (they will) to have a full picture and understanding of a borrower’s financial history, especially during COVID-19.

  • If a borrower has applied, been approved, returns to work, and applies for a refinance or new home purchase, they may not qualify. Please have candid conversations with your borrowers as we all navigate this unprecedented time.

Tips For Applying For a Mortgage Loan Amid COVID-19

For more information on forbearances, the Consumer Finance Protection Bureau may assist. Click here to learn more.