Mortgage forbearance is a short-term deal between you and your loan servicer that lets you stop or lower your monthly mortgage payments when you're having trouble making ends meet.
Staring at a mortgage bill you can’t pay is one of the worst feelings. You’re not alone. Life throws curveballs. Job loss, a medical emergency, divorce, a natural disaster. Any one of those can make it impossible to keep up with your monthly payments. That is exactly what forbearance is built for.
Mortgage forbearance is a formal arrangement with your loan servicer where you temporarily stop making payments or make smaller ones for a set period. The Consumer Financial Protection Bureau defines it as a process where your servicer arranges for you to pause or reduce mortgage payments during a short-term crisis. The key word here is temporary. This is not forgiveness. You are hitting the pause button, not the delete button.
Here is what trips people up. They think forbearance means they got a free pass on a few months of payments. It does not work that way. Every dollar you skip still has to be repaid. You and your servicer will agree on how that happens once your forbearance period ends.
That said, you do have real options for repayment, and a lump sum is rarely the only one. This is usually the biggest misconception borrowers have about forbearance. They hear the word and think it means free money. It is not free money. It is borrowed time.
The Mortgage Bankers Association reported that about 180,000 homeowners were in active forbearance plans as of March, which is just 0.36% of all serviced mortgages. That number is way down from the pandemic peak when roughly 4.3 million loans were in forbearance at once. Forbearance has settled back into its original role: a lifeline for temporary hardships, not a long-term payment strategy.
I talk to borrowers every week who are scared to even bring up the word forbearance because they think it will ruin their credit or mean they are losing their home. I get it. But ignoring the problem is what causes the real damage. A single phone call to your servicer can open the door to options you did not know you had.
A phone call starts the process. You call the company that handles your loan payments and tell them that you are having trouble with your money. That's all there is to it. You don't need a lawyer. You don't have to fill out a lot of paperwork upfront, but some servicers may ask for more paperwork later.
Your servicer will explain the forbearance options that are available for your type of loan. FHA, VA, USDA, Fannie Mae, and Freddie Mac are all examples of federally backed loans. The protections are already built into federal rules. If you ask for it because you are having trouble paying your bills, the servicers of these loans must give you forbearance. AmeriSave helps people with all of these types of loans, and our staff can help you figure out which ones are best for you.
Most forbearance periods are between three and six months long. You might be able to get an extension on that, depending on the type of loan you have and the type of hardship you're going through. For instance, FHA borrowers can get up to 12 months of forbearance. VA loans also have similar options for extensions.
The details may be different, but the idea is the same: you get time to get better without the threat of foreclosure.
So what happens to your payments while you're in forbearance? They don't go away. The balance you owe can keep getting interest. If you take out a $350,000 loan at 6.5%, your monthly payment for principal and interest is about $2,212. If you stop making payments for six months, you'll have to deal with about $13,272 in missed payments. The interest that builds up during those months is also added to the total. You need to know that this is real money before you go in.
But this is the most important part. Forbearance gives you time without starting the foreclosure process. Your servicer can't start foreclosure proceedings while you are in an active forbearance agreement. That one piece of protection could mean the difference between keeping your home and losing it.
I always tell people in the DFW area and everywhere else to get everything in writing. When your servicer agrees to a forbearance plan, ask for a written confirmation that tells you exactly how long it will last, how much you will have to pay during that time, and what options you will have when it ends.
Please keep that letter. If there is any confusion about the terms, you might need it later.
During forbearance, late fees shouldn't show up. Call right away and push back if you see fees on your account while you are still in an active agreement. For federally backed loans, the rules are clear, and most private servicers do the same thing.
The short answer is that almost any homeowner dealing with a legitimate temporary hardship can request forbearance. The type of loan you have determines the specific rules and protections.
If your mortgage is backed by FHA, VA, USDA, Fannie Mae, or Freddie Mac, and roughly 75% of all mortgages fall into one of these categories, you have the strongest protections. Your servicer must offer forbearance when you request it due to financial hardship. According to the Department of Housing and Urban Development, FHA borrowers can access forbearance as part of the agency's loss mitigation program, which also includes partial claims and loan modifications.
You do not need perfect documentation to get started. Telling your servicer that you are facing a hardship is often enough to begin the process.
A loan that is not federally backed, maybe it is a portfolio loan held by a bank, or a private-label securitized loan, can still get forbearance but it is not guaranteed by law. Most private servicers offer some form of hardship assistance because foreclosure is expensive for everyone involved. The terms can vary more, though, so ask questions and get everything in writing. It is also worth knowing that some state laws give borrowers extra protections beyond what federal guidelines require, so check what applies in your state.
MBA data shows that 76% of current forbearance users cite temporary hardship such as job loss, death of a spouse, divorce, or disability. Another 21% entered forbearance because of natural disaster. A small portion, under 3%, are still dealing with lingering effects from the pandemic.
You do not have to fit a specific mold, but your hardship should be temporary in nature. When your income loss looks permanent, a loan modification may serve you better.
This is where people get nervous. Once forbearance ends, how do you pay back what you missed? Your servicer will present you with options, and understanding them ahead of time takes a lot of the anxiety out of the process.
You pay the entire missed amount in a single lump sum. Sounds scary, right? This option exists, but servicers rarely expect you to take it. If you just got a large insurance settlement or a bonus at work, reinstatement can make sense. For most people, though, one of the other options is more realistic.
Your servicer spreads the missed payments across several months by adding a portion to your regular monthly payment. Going back to that $350,000 loan example, if you missed six months of payments totaling $13,272, a 12-month repayment plan would add about $1,106 to your monthly bill on top of your normal $2,212 payment.
That comes out to roughly $3,318 a month until you are caught up. It is manageable if your income has stabilized, but it does mean less money in your pocket for a while. Your servicer usually has some flexibility on how long they spread the repayment, so push back if the first offer feels too tight.
A modification changes the terms of your original loan. Your servicer may extend your loan term, reduce your interest rate, or add the missed payments to your principal balance to bring the monthly amount down to something you can handle. AmeriSave borrowers dealing with extended hardship can ask about modification options that keep the monthly payment within reach.
This one is a game changer for a lot of borrowers. With a deferral, the missed payments get moved to the end of your loan as a non-interest-bearing balance. Your monthly payment goes right back to what it was before forbearance. For FHA loans, a partial claim works similarly. The HUD describes the standalone partial claim as a zero-interest junior lien against your property that does not require repayment until you sell the home, pay off the mortgage, or refinance. That means you can resume normal payments without any spike in your monthly bill.
Most servicers that work with government-backed loans now offer some form of payment deferral. It is one of the best outcomes for borrowers after forbearance, and you should definitely ask about it.
So, which choice is best for you? That depends on how much money you have. A repayment plan lets you catch up pretty quickly if your income is back to normal and you have some extra money. A deferral or modification gives you more room if things are tight. The most important thing is to talk honestly with your servicer about what you can afford. AmeriSave tells borrowers to think about the numbers before choosing a repayment plan, because a plan you can't stick to will only get you in trouble again.
When I talk to borrowers about forbearance, the question of credit comes up almost every time. People are scared that asking for help will hurt their credit score. It's understandable to be worried about this, but the truth is more complicated than most people think.
If you were current on your mortgage when the forbearance started, federal rules say that your servicer must tell the credit bureaus that your account is current during the forbearance period. That is a big deal. It means that your credit score won't change as long as you made the payment on time.
People who were already behind on their payments before asking for forbearance get a different result. Your servicer tells you what your status was at the time. A borrower who was 30 days late when they entered forbearance stays reported as 30 days late until the forbearance ends and they catch up.
You should think about more than just your credit report when it comes to money. Most types of loans keep accruing interest during forbearance, which means that your mortgage will cost more in the long run. You are paying that much money to be able to press pause.
If you want to refinance or buy a second home, lenders may look at your recent forbearance history as part of their risk assessment. Fannie Mae and Freddie Mac usually require borrowers to make at least 12 consecutive on-time payments after leaving forbearance before they can get a new loan or refinance. We can help you understand how forbearance affects your ability to get loans in the future at AmeriSave so you won't be surprised.
But let me be clear. A foreclosure on your record is a lot worse than a forbearance. Call your servicer if you have to choose between asking for help and ignoring the problem until the notices start coming.
When your forbearance period ends, you have a few options. Before the end date, your servicer should get in touch with you to talk about your options. You should call them if they don't get in touch with you first.
It's best to do nothing. Your loan goes into delinquency if your forbearance period ends and you don't start making payments again or set up a repayment plan. Your servicer can then start the foreclosure process, but federal rules say they have to wait at least 120 days after you miss a payment before they can file.
Here are some quick options for what to do after forbearance. You can start making your regular payments again and come up with a plan to pay back the money you missed. If your finances have changed for good, you can ask for a loan modification. You can ask for a payment deferral, which means that the missed payments will be added to the end of your loan.
You can refinance your mortgage if you have enough equity and meet the seasoning requirements. If keeping the house isn't possible financially, you could also think about selling it or doing a short sale.
I always tell people who borrow money to call their servicer at least 30 days before their forbearance period ends. That gives you and the servicer time to look at your situation, run the numbers, and come up with a payment plan that fits your budget. You are putting yourself in a corner if you wait until the last day.
During forbearance, things may have gotten worse for you instead of better. That's fine. Let your servicer know. They would rather work with you on a modification or an extended plan than start the foreclosure process, which costs everyone time and money. Foreclosure costs lenders a lot of money too, and most of them will do everything they can to avoid it when you talk to them.
One last thing. If you were able to stay in your home because of a natural disaster, your options may be different from someone who lost their job. The Federal Housing Administration has special tools to help borrowers who have been affected by a disaster, such as the payment supplement option, which lets you use a partial claim to lower your monthly payment for up to three years.
According to the MBA, about 67.83% of borrowers who worked out their loans since the pandemic are still making their payments on time. That says something important to you. Most of the time, people who ask for help get through it. AmeriSave has helped thousands of people go through this process, and most of them were able to keep their homes.
Forbearance is one tool, but it is not always the right one. Before you commit, think about whether another option fits your situation better.
A hardship that looks like it will last a while usually calls for a loan modification instead. It permanently changes your loan terms. A repayment plan works when you just need a month or two to catch up and can handle slightly higher payments in the short run.
Refinancing can lower your monthly payment by locking in a better rate or extending your term. This works best if you have equity in the home and are not yet behind on payments. AmeriSave offers refinancing options across conventional, FHA, and VA loans, and can help you compare what a refinance might save you.
HUD-certified housing counselors are a free resource that a lot of people overlook. They can review your finances, contact your servicer on your behalf, and help you evaluate which option gives you the best shot at keeping your home. You can find one through the Consumer Financial Protection Bureau website.
Short-term budget adjustments can also help. Maybe you pause retirement contributions for a few months or cut a subscription service you do not use. Small changes can add up fast when you are trying to cover a $2,000 mortgage payment.
Veterans and active-duty military have an extra safety net. The VA has its own set of loss mitigation options that go beyond standard forbearance. VA servicers are required to make every reasonable effort to help you keep your home before they can move toward foreclosure.
This includes extended repayment plans, interest rate reduction refinance loans, and compromise sales. With a VA loan, make sure your servicer is walking you through all of those VA-specific options, not just the generic ones.
Not being able to do something is not a failure. It is a tool. If you are having trouble making your mortgage payment because of a temporary setback, call your servicer. You have more choices the sooner you call. Don't let fear or shame stop you from protecting your most valuable asset. Your money is in your home, and you should fight for it. AmeriSave can help you figure out which programs apply to your loan and guide you through the whole process. Learn the facts, think about your options, and choose the one that gives your family the most space.
Your servicer will say that your account is current during the forbearance period if you were current on your loan when it started. That means your credit score won't change. If you were already late, your delinquency status stays the same. Ignoring the problem is the worst thing you can do for your credit. If you don't make your payments on time and don't have a forbearance plan, you'll get delinquency marks that stay on your report for years. If you're not sure how forbearance will affect your credit, AmeriSave can help you figure out your options and explain the reporting rules that apply to your loan type.
Most forbearance plans last from three to six months. In some cases of hardship, FHA, VA, and USDA loans can be extended for up to 12 months or more. Depending on your situation, Fannie Mae and Freddie Mac loans may also offer extensions. The length of time depends on the type of loan you have, the type of hardship you're going through, and what your servicer agrees to. If your finances get better, you can end forbearance early. For more information on how forbearance timelines work for different loan products, contact your servicer or visit the AmeriSave Resource Center.
Yes. Forgiveness is not the same as forbearance. You still have to pay all the payments you missed. But you have choices for how to pay back, such as payment plans that spread the amount over time, loan modifications that change your terms, and payment deferrals that move the missed amount to the end of your loan. You almost never have to pay back all at once. Your servicer must show you all of your options. Your servicer can tell you more about how to pay back your loan.
You can, but you have to wait. You can't refinance until you've made at least 12 consecutive on-time payments after your forbearance period ends with Fannie Mae or Freddie Mac. The seasoning requirements for FHA and VA loans are the same. If rates have gone down or you want to change the terms of your loan, refinancing can be a good idea once you reach that point. Our refinancing options at AmeriSave include conventional, FHA, and VA loans. Our team can tell you exactly when you will be able to do this.
Forbearance means that payments are put on hold or lowered for a short time. Changing the terms of your mortgage through a loan modification can mean a lower interest rate, a longer loan term, or a new balance. Forbearance is best for short-term problems, while modification is better for problems that will last for a long time. After forbearance ends, a modification is often the next step. Look at AmeriSave's loan options to find the one that works best for you.
Yes. Fannie Mae and Freddie Mac offer forbearance programs for conventional loans that they back. Your servicer may still offer forbearance if you have a portfolio loan or a private-label security, but they are not required to do so by law. You should get in touch with your servicer right away if you're having trouble, no matter what. Most lenders would rather find a way to work things out than go through with foreclosure.
No, not by itself. Forbearance is meant to keep people from losing their homes. Your servicer can't start foreclosure proceedings while you are in an active forbearance agreement. If you don't start making payments again or come up with a different plan, the risk comes after forbearance ends. That's why it's so important to get in touch with your servicer before your forbearance period ends.
Call the company that handles your loan and tell them that you are having trouble with money. That request alone is enough to start the process for federally backed loans. Some servicers also let you make requests online through their website. Be ready to explain your situation and have your loan account number ready. Your servicer should tell you what your options are and when they will be available.
Yes, most of the time. During the forbearance period, interest will still build up on your outstanding balance. At 6.5%, that adds about $1,896 a month in interest on a $350,000 loan. That adds about $11,375 in interest over six months of forbearance. Some ways to reduce losses, like FHA partial claims, don't charge interest, which helps keep the total cost down. Talk to your servicer about which way to pay back your loan will cost you the least, or get in touch with AmeriSave to look at your options side by side.
If your servicer won't let you forbear on a federally backed mortgage, they may be breaking federal rules. The first step is to file a complaint with the Consumer Financial Protection Bureau. You can also get in touch with a HUD-certified housing counselor for free. They can speak up for you. If your current servicer isn't helping, you might be able to refinance with a different lender once things settle down.
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