A forbearance program is often a short-term solution to what is usually a greater problem. In such a program, a lender - such as your bank - agrees not to foreclose on your property so long as you keep making reduced monthly payments. These are ideal for people experiencing temporary setbacks, such as job loss or health issues.
However, this solution often causes other problems. The biggest thing to think of is the fact that, because the bank is lowering your monthly payment, your principle is not being reduced at the rate it once was. This means your interest is accruing on a higher principle balance and it will take longer to pay off your loan. Additionally, some lenders will still list your account as delinquent, even if they approve the forbearance plan. Make sure to ask your lender if this is their policy prior to agreeing to a forbearance plan. A delinquency could hurt your credit score.
The forbearance plan made news recently as Fannie Mae and Freddie Mac agreed to extend their forbearance programs to out-of-work homeowners; previously only up to 90 days. In order to qualify for these plans, homeowners cannot be working at all; however, a co-borrower may still be employed.
Beyond the initial requirement of being unemployed, there are further steps to take. While it may be possible to negotiate with your lender by yourself, this can be a daunting task and you are always welcome to contact a Jacksonville Foreclosure Defense Attorney who may be able to help you deal with your lender and may provide more peace of mind throughout the process. Contact a Foreclosure Defense Attorney to discuss your options.
