The FDIC is proposing a forbearance program to assist homeowners who are struggling to make their mortgage payments. The idea is similar to any loan forbearance program with a few exceptions. If a homeowner has defaulted on a mortgage due to unemployment the FDIC wants lenders to allow forbearance on a mortgage that would significantly lower mortgage payments or eliminate them altogether for a period of up to six months. The rate at which homeowners are defaulting and even redefaulting on home loans is still a problem for the housing market, so this solution that all lenders allow forbearance options is something that could help a recovering market.
There are some mortgage companies who already have similar plans and they seem to be working well for the most part. If a homeowner defaults on a loan or loses their job due to layoffs then there are options in which their mortgage payment would be lowered to a rate that would allow them to keep the majority of living expenses for a time without worrying about their mortgage payment.
There are rules and exceptions in regard to the forbearance. If a homeowner’s history shows they have always had difficulty making their payments then they may not qualify for the forbearance. On the other hand if a homeowner who has been laid off has a good lead on a job or if they are categorized as someone who can easily find another job then they could be given a full forbearance.
Forbearance to homeowners is a good plan but one needs to inquire about what the interest rate of the mortgage will be doing during the period of forbearance. If it continues to compile then its up to the homeowner to figure out their options as to if the forbearance is right for their particular case. Little or no payment on a mortgage at the present seems like a dream come true for many but if interest is piling up then when the period of forbearance is over there is going to be even more owed to the lender. Checking with your mortgage lender is the best way to find out the specifics of what is offered by way of forbearance, but it isn’t an option for everyone. If a homeowner is able to make payments and stay afloat then it would be best to ride out the recovery until brighter days come rather than seek out a mortgage forbearance.
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