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What is Forbearance and what does it mean in Texas?

by Dec 22, 2020

Need Help With Your Texas Mortgage Due To COVID-19 Circumstances?

A lot has changed in the year 2020. Loss of job security and a new way of life has threatened many homeowners with foreclosure. What was once a stable and routine way of existence is now having people scramble for debt relief and credit repair.

Because this is not the fault of those with Texas mortgages, we are here to help. If you need debt relieve due to loss of income, contact us immediately. We will determine the best option unique to your circumstances and help you repay missed payments.

Below is a quick overview of some tools available for mortgage debt relief. These terminologies will give you a better understanding of these choices.

What Is Mortgage Forbearance

  • This program is for those who are either delinquent in paying their mortgage or think they are going to be delinquent due to temporary medical or financial reasons.
  • By granting forbearance the lender may waive late fees.
  • A mortgage lender may suspend or reduce the payment for any period up to a year. Extensions may be granted.
  • If you make your payments and are current before forbearance, it will be indicated on your credit report that you remained current until the forbearance period expired.
  • Should you be delinquent before being granted forbearance, it will be reported with the same amount of delinquencies until those payments are made up or the period ends.
  • While in forbearance you make up delinquent payments, this will be posted as current on your credit report.
  • Since the lender has agreed to this arrangement, forbearance will help protect your credit. If it is reported to the credit bureaus, typically this is not viewed in a negative manner.
  • You must be offered other mortgage terms or a modification at the end of forbearance or pay the entire past due balance.

What Is Mortgage Deferment

  • The loan lender will allow you to discontinue making payments for a specific time. The difference pertaining to deferment is those funds owed are added to the total mortgage loan at final payoff.
  • Interest will still be accruing. Those mortgage payments along with principal and interest will still be owing when the final mortgage loan is due.
  • The term “deferment” is usually used in conjunction with student loans.
It is vital to work out a forbearance or deferment agreement with your lender. Most importantly, get it in writing. Ask to be able to view online the status of your account Understand thoroughly the responsibilities of a forbearance agreement . Make sure your lender has your updated mailing address. Always stay in contact with your servicer and be vigilant in receiving correspondence stating the completion and acceptance of your application.

What Are Some Of The Qualifiers For A Texas Mortgage Forbearance Or Deferement?

  • Your monthly expenses must be a certain percentage of your income.
  • Your home must be your principal residence and you may not vacate the property permanently.

What Is Section 4022 Of The Cares Act?

For federally held single-family-home mortgages held by Fannie Mae and Freddie Mac, the government has suspended foreclosures through December 31, 2020 pertaining to their mortgage programs.

The Fair Housing Administration, Department of Veterans Affairs and the US Department of Agriculture have also stopped foreclosures through December 31, 2020 pertaining to their mortgage programs.

  • Remember that if you are not in forbearance or deferment, these foreclosure protections for your Texas mortgage will not protect you from owing mortgage payments.
  • When the pause on foreclosure ends, you could lose your home from nonpayment.
  • Your lender will report you to credit agencies for missed payments, even if it is not currently allowed to foreclose due to a federal law.
In conclusion, it is important to watch out for scams. We will help guide you from false government and aid programs. These ultimately can put you in even more debt and cause you to lose your property. Contact us for advice and help with finding the best way to get debt relief. In these uncertain times, it is good to know there are reliable resources to save your home from foreclosure. Credit repair is of utmost importance. Funding and loans are easily obtainable if you demonstrate financial savvy. We are here to assist you.

What Are Your Options After Forbearance?

  • Reinstate- pay the total amount due.
  • Choose repayment- Repay the forbearance amount in addition to your current mortgage payments over 12 months.
  • Deferral- defer the payments. If eligible try adding the missed payments to the end of the loan. Not all banks will do this.
  • Modify or refinance your loan- Try working with your bank to refinance and see if you can get lower payments. Extend terms to lower payments.
  • Sell-finally if you must sell your home. Do not let it go into foreclosure and ruin your credit and dignity. You may need to relocate or downsize. There are too many options to mention here. If you must sell, we are here and can walk you through some options and give you a free home evaluation. We can close quickly but need to know your situation to have time to work with the banks on your behalf. We also want to help you keep your credit in good standing.
Options during and after forbearance. Choose a plan that works for your financial situation. If you are looking for other options, we are here to help navigate through the chaos. To schedule a call for more information, message us at scvpropertysolutions@gmail.com. We buy homes in and around Texas, Oklahoma, and Louisiana.

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