What Will Happen When My Mortgage Forbearance is Over?
The forbearance enrollment window will officially end Sept. 30, 2021. If you initially took advantage of the forbearance programs offered for federally backed mortgages at the beginning of the pandemic, you were able to stay in forbearance for 18 months.
Homeowners who have not previously asked for forbearance can still request assistance until Sept. 30. 2021. Their maximum forbearance period, however, will only be 6 months.
The following chart summarizes the forbearance period based on time of application:
FHA COVID-19 FORBEARANCE PERIODS (UPDATED JUNE 25, 2021)
| Initial forbearance date | First forbearance period | Second forbearance period | Third forbearance period | Maximum forbearance period |
| March 1, 2020 to June 30, 2020 | Up to 6 months | Up to 6 months | Up to 6 months (in 3-month increments) | Up to 18 months |
| July 1, 2020 to Sept. 30, 2020 | Up to 6 months | Up to 6 months | Up to 3 months | Up to 15 months |
| Oct. 1, 2020 to June 30, 2021 | Up to 6 months | Up to 6 months | None | Up to 12 months |
| July 1, 2021 to Sept. 30, 2021 | Up to 6 months | None | None | Up to 6 months |
The question now is how do I avoid foreclosure when my forbearance is over? What are my options?
First, the Consumer Financial Protection (CFPB) has issued a pause on all mortgage foreclosures until 2022. However, if you don’t plan you could see your mortgage foreclosed in the year ahead.
There are several things you could do to decrease your risk of foreclosure as you exit mortgage forbearance.
- Refinance – Refinance can help you change the rate of interest and terms of your mortgage. This strategy would pay off missed payments from the COVID-19 forbearance plan and you can begin a new mortgage with new terms. Fannie Mae and Freddie Mac loans offer even more flexible refinance options.
- Reinstatement – With this method you can pay back all your missed payments and then resume your regular mortgage payments. Unfortunately this option will present financial challenges for most homeowners.
- Repayment Plan – With this plan you can pay an additional amount each month in addition to your regular mortgage until the missed payments are paid off.
- Flex Modification – This method would work best for those so financially impacted that they are unable to make their monthly payments. This is essentially a loan modification whereby, similar to a refinance, you could add the missed payments to the principal and change the terms of the entire loan. Unlike a refinance, however, you could stay with your current lender and simply change the terms.
- COVID-19 Payment Deferral – This option would simply allow you to begin making monthly payments again as you did prior to the pandemic. The missed payments would be due either at the maturity date of your loan or if and when you decided to refinance.
The most important thing to do when forbearance ends is to reach out to your lender or servicer and discuss your options. If you do not qualify for an extension, your servicer or lender will discuss exit strategies like the ones described above to assist you and avoid foreclosure.
Reach out to the Home Assistance Center regarding your options, let us work out a strategy that fits your needs and provide you the relief that you deserve.
