In the past weeks, there have been lot of myths floating around on mortgage forbearance. With unemployment rates going up, homeowners are seeking a forbearance plan as an alternative to foreclosure. If you have been impacted by Covid-19 you probably have some concerns about your mortgage obligations. To better understand if forbearance can help you, here are the answers to some common questions:

What is forbearance, and who is it for?
A forbearance is a temporary suspension of your mortgage payments intended to allow you the time and flexibility to manage the financial challenges affecting your ability to pay your mortgage. A forbearance plan is available to customers who are experiencing financial hardship due, directly or indirectly, to COVID-19. If your loan is owned by Fannie Mae or Freddie Mac, or if you have an FHA, VA, or USDA loan, your loan is likely subject to the CARES Act. The CARES Act allows for a forbearance of 180 days upon request. If your hardship is ongoing, additional extensions can be made for up to a total of twelve months.

What happens when the forbearance period ends?
At the end of the forbearance period, the total amount of payments suspended during the forbearance period, will become due and payable. If you are unable to resume your normal monthly payments, you'll need to contact your lender. Other assistance options may be available to you such as qualifying for a loan modification or setting up a repayment plan. Late fees will not be charged and delinquent credit reporting will be suppressed during the duration of the forbearance plan(s).

I haven't been impacted financially by COVID-19, but I am still concerned about my financial obligations.
If you are able to make your monthly payment, you should continue to do so. You should never skip or miss a payment without first contacting your lender. If your employment hasn't been affected by COVID-19, you may qualify to refinance to a lower rate. Refinancing to a lower rate could allow you to lower your monthly payments and shorten or maintain your loan's term. This will ultimately save you money in the long term. Forbearance plans should only be used by homeowners who are genuinely in distress and cannot afford to make payments.

For more information on forbearance and COVID-19 related options, visit our dedicated FAQs website. If you have been financially impacted by COVID-19 and would like to request a forbearance plan with Caliber, visit our self-help link, or call 800-401-6587 for further assistance.

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