Mortgage Forbearance in the COVID-19 Real Estate Market


Lisa Barton



Mortgage Forbearance in the COVID-19 Real Estate Market

We spoke to Mike Hendrickson, Sr. Mortgage Consultant at U.S. Bank, to get his thoughts on mortgage forbearance during Covid. Here's what he had to say:

Every professional in the housing/mortgage market understands the crushing economic changes for many households as a result of coronavirus. It makes all the sense in the world for those households to pursue the forbearance option (skipping mortgage payments for 180-360 days) if needed. But it may make considerably less sense for those who aren't truly in need. Either way, the decision should not be taken lightly and its consequences are already being felt.

If we look beyond the impact on rates and program availability, there are other reasons a homeowner should think twice before requesting a forbearance they don't need. As the guidelines currently stand, there is no guarantee that they'd be able to refinance or get a new mortgage with forbearance on their credit report--especially if the forbearance is ongoing.

For those who've followed the forbearance and CARES Act news reasonably closely, the law states that there is to be no adverse credit reporting as a result of forbearance. While it is true that forborne payments will not be reported as late, the forbearance itself could still be reported.

While the forbearance itself is not affecting FICO scores, it can lead other lenders to make changes that cause scores to drop, and it can absolutely hurt your ability to buy/refi in the future. Please check with your lender when you apply for a new mortgage and have the discussion upfront if your current mortgage is in forbearance.

This article was prepared by:
Mike Hendrickson
Sr. Mortgage Consultant
U.S. Bank

Lisa Barton

Lisa Barton

Lisa Barton, the owner of Lisa Barton Team Ponte Vedra Beach - Keller Williams Realty Atlantic Partners, is a top real estate agent in Ponte Vedra Beach and the surrounding communities. Lisa specializes in luxury real estate sales, including gated communities, waterfront properties, and estate homes. A graduate from the University of Florida and George Mason University, Lisa currently resides in Sawgrass Players Club with her husband.

The Lisa Barton Real Estate Team in Ponte Vedra Beach

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