As news and information about relief assistance swirls around in the midst of this crisis, there are lots of questions about what to do with your mortgage payments. To some, it can be interpreted that if you just don't pay your mortgage payment right now all will be forgiven. This is not true, and can have some serious affects on your financial health, and truly the health of the economy as a whole.
Here is information from a lender friend of ours, Scott Groves with Movement Mortgage, that explains forbearance and how it works:
"If you, or your clients, are in dire-straights and having to make the toughest of financial decisions - like, what bills do I pay or how do I buy food - then I understand that you must do EVERYTHING you can to improve your cash-flow situation.
That being said, applying for a FORBEARANCE on your mortgage payment should be an ABSOLUTE LAST RESORT when it comes to your finances.
In the first 18 minutes of the video below, I cover:
- Forbearance (aka DELAYING mortgage payments for 3 months) is NOT the same thing as having those payments "forgiven"
- There could be several unknown and unintended consequences of taking a mortgage forbearance.
- If 25% of mortgage holders in the United States request a mortgage forbearance, the housing market and the mortgage markets could cease to exist as we know it.
Please, watch this video, do what's best for your family, and please use a mortgage forbearance tool as an absolute LAST RESORT.
Let's do our small part, so that when the shelter in place order is lifted, we have a healthy housing market & economy to come back to. PLEASE forward this email and/or the video link to your clients, friends, and family."