Forbearance is NOT Forgiveness!
If there already wasn’t enough on our plates, a new pile of nonsense is being thrown our way. Many in the media and so called “experts” are telling people to simply call their lenders and go into forbearance on their mortgage loans. Some of these “experts” are telling people that it means that the missed payments will just be added to their outstanding balance and paid at the end of that loan! Guess what, that is simply NOT TRUE!!! Forbearance will always have specific terms and deadlines for repayment and is not to be confused with the words “Forgiven or Deferred!
In addition to this misinformation being spread around by those who should know better, people are sharing incomplete information about the potential credit challenges any of these actions might have on a borrower. While some are suggesting that these action should not impact a person’s credit, I will go on the record as stating that there will be credit challenges down the road for those that do, here is why.
- Servicer's are not going all reprogram their systems not to report missed payments, and they certainly will report no payments.
- Even if servicers don’t report missed payments as late, how will anyone explain a payment not being made on that mortgage as shown on a credit report of mortgage history? And don’t think for a minute that some investors will require mortgage histories on future loans for the next few years!
- Why wouldn’t someone make their required payments? You are still working or were left unemployed in most cases. But unemployed people may very well be taking in MORE NET INCOME now than before they were laid off, or furloughed due to their states unemployment payments AND the $600 a WEEK in federal assistance!
- Oh yes, don’t forget the stimulus checks that are on the way!
PLEASE, make sure you share the message that forbearance is an absolute last resort! This also goes for all your other financial obligations! Coronavirus is not a reason to try and scam the system to not pay your bills! Don’t let people try and convince your clients otherwise! Forbearance may be a short term benefit with a very long term consequence! Real experts would know this and share that information!
These times are challenging enough, don’t sit on the sidelines and allow your clients and referral partners to compound their current challenges by making really poor financial choices. Help find solutions and explain the options. In some cases, forbearance may just be the only option; but is should only be used as that last option!
Use YOUR ability to record a video sharing this information with your clients, referral partners, and through your social media channels!
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