While buying a home is a great experience for many people in Texas, unexpected circumstances can put people in danger of losing their homes through foreclosure. People who have fallen behind on their mortgages because of sudden losses of income or medical emergencies might be granted forbearances from their mortgage lenders. Forbearance might give people time to get back on their feet and resume making mortgage payments when the forbearance period is over.
What is forbearance?
Forbearance occurs when a lender agrees to allow a borrower to temporarily stop making payments on a mortgage or reduces the payments so that the borrower can afford them for a short time. The missed payments will be added to the back end of the loan and will eventually need to be paid. However, during the forbearance period, the borrower will not risk foreclosure for failing to pay. People who are at risk of foreclosure should reach out to their lenders and ask for forbearance. The lenders will then decide whether the reason given is good enough to grant the request.
Reasons for forbearance
To qualify for a forbearance, the borrower must have a good reason for why he or she has fallen behind on his or her mortgage payments. A medical emergency or a sudden income loss might qualify. Under the CARES Act, borrowers with federally-backed mortgage loans who are currently facing pandemic-related financial problems can receive forbearances for an initial 180 days. This period can be extended for an additional 180 days for a total of 360 days.
While forbearance might be a good option for some borrowers who have fallen behind on their mortgages, lenders may not agree to grant the requests. People who are facing foreclosure and who cannot secure a forbearance agreement might want to consult with an attorney about other options for saving their homes. Foreclosure is not always inevitable and might be stopped in many cases.