Understanding forbearance

We are in unprecedented times indeed. And for the first time ever, you may find yourself in need of mortgage support. We get it and we’re here to help you navigate through all of the uncertainty. It starts with understanding what forbearance is, and what is isn’t.

I’ve heard in the news that I can defer my payment. How does that work?

Deferring your payment may be part of the process, but if you qualify, it’s something that would happen later on. The first step is to be approved for mortgage forbearance.

What is forbearance?

Forbearance allows qualifying clients who are experiencing financial hardship related to COVID-19 to temporarily pause their mortgage and home equity line of credit payments for a period of time. Not only are you freed from making mortgage payments during that time, your credit will not be affected if you were current on payments at the time of the forbearance, and you will not receive late fees during the forbearance period.

Additionally, if you are able to make payments or partial payments while you are on the forbearance plan, those will still be accepted and will not cancel the forbearance.

What happens at the end of the forbearance period?

Under normal circumstances, clients may pay the suspended payments in full and regular payments resume. But we realize how uncertain times are right now. So at the end of the forbearance time frame, we’ll reach out to you to get an update on your situation. If you’re not able to resume your regular payments and the payments postponed during the forbearance period (including the current month’s payment), we can discuss other options such as a forbearance extension, repayment plan, deferment and modification.

How do repayment plans and modifications work?

If you’re still facing hardship after the forbearance period has ended, the investor of your loan, such as Fannie Mae or Freddie Mac, may offer other options, including a repayment plan or modification. With a repayment plan, you’ll simply pay a portion of the amount that’s past due—along with your regular mortgage payment—for a period of time until your loan is current. A modification is different in that the terms of your original loan are amended to accommodate for the amount that is still outstanding.

If forbearance suspends payments for a period of time, why do I need to repay them at all?

Even if you’re in a forbearance plan and not making monthly payments, we may be contractually required to pay the investor of your loan—like Fannie Mae or Freddie Mac. We’ll continue making those payments, so you don’t have to during what’s understandably a stressful time. When the forbearance period ends, we’ll discuss options like a forbearance extension, repayment plan, deferment and/or modification. Then when you ultimately pay us back, it allows us to meet our obligations so that we can continue to support our clients’ needs.

Who should apply for forbearance?

Even if you think you may experience future impacts related to COVID-19, like unemployment, caring for someone who’s sick or other related impacts, please continue making your payments while you’re able. It’s better to hold off on applying for forbearance until you’re certain that you won’t be able to pay your mortgage. That way, you can be covered when you need it most, as every forbearance plan, even ones that may be extended, ultimately has an end date.

Can I still access my home equity line of credit if I’ve applied for forbearance?

It depends on your individual situation. After you apply for forbearance, we’ll review things like your prior payment history and current principal balance to determine whether you’ll have continued access to your line of credit and let you know as soon as possible.

Our Chief Banking Officer John Pataky shares some helpful words from his home office

Forbearance key details

Once forbearance begins, it can ease stressful times with:

  • Payment pause which starts at 90 days
  • No impact to your credit
  • No late fees

Need to apply? Use our streamlined form