A Surprising Insight About COVID Loan Forebearance
Did you participate in a mortgage loan forebearance during COVID?
I spent over an hour last week with Wendy, who works with a law firm that represents homeowners who are struggling with their mortgage payments, resulting in short sales. A short sale happens when a seller needs to sell, but the market price is less than what they owe on the home. The lender decides to accept less for the mortgage and the home then gets sold.
The point of our conversation was for her to enlighten me about how homeowners that participated in COVID loan forebearance determine how they should pay back the amount accrued during the forebearance period. The fact is, a lot of homeowners don't know how their lenders plan to get repaid for all those skipped payments. As a result, homeowners who are selling their home can come to closing thinking that they have enough money from their sale to purchase their next home ... and they don't.
If you participated in COVID loan forebearance and aren't sure what that means in terms of how much you now owe on your existing mortgage, give me a call or send me a note. I can help find out how your lender plans to recoup missed payments and, potentially, provide guidance on how to better plan for a successful closing when you decide to sell your home.
Questions about real estate? I'm here for you!
Mitch
612-516-4323
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