Exit your forbearance
Learn about your repayment options
Before your mortgage forbearance ends, you should reach out to your servicer to plan what comes next.
This video explains the common options available to borrowers exiting forbearance. If you only hear about a lump-sum repayment, ask about other options.
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There are a number of options for repaying forbearance, but which options are available to you may depend on who owns or backs your mortgage, your mortgage servicer, and your particular situation. There's no one-size-fits-all for options. For instance, if you have a federally backed mortgage, which is a loan from Fannie Mae, Freddie Mac, FHA, VA, or USDA, your servicer cannot require you to pay back your forbearance as a lump sum. Many servicers for non-federally backed mortgages also do not require lump sum repayments but some may, so if you only hear about a lump sum repayment ask about other options.
There are four common ways to repay the money due from your forbearance. The first option is sometimes called a repayment plan. This can be a good option if you can make your regular mortgage payment plus some extra. It adds the amount unpaid during the forbearance to your regular monthly payments over a certain period of time. Let's say your servicer offers you a forbearance where you can pause your mortgage payments for three months, and your regular mortgage payment is $1,000 each month. So the payments you missed during your forbearance add up to $3,000. Suppose your servicer offers you one year to make up the $3,000 that was unpaid due to the forbearance. Doing the math, that comes to $250 added to your regular mortgage payment each month for one year. So your total mortgage payment would be $1,250 until you make up the skipped payments. After you've repaid the payments you skipped, your monthly payments would return to the normal $1,000.
Another option is sometimes called payment deferral. That's when you wait to make up your unpaid forbearance amounts until the end of the term of your loan or when you sell or refinance your home. This option can be useful if you can keep making your regular payment but can't pay any extra. If you receive a payment deferral, you don't need to make up the payments you are allowed to pause or reduce during forbearance until the end of your loan. At the end of the loan, your servicer may require you to repay the skipped payments all at once from the proceeds of the sale or through refinance. Let's say you sell your house in 10 years—in that case, you would pay off the forbearance then.
Another option is sometimes called a loan modification. That's when you work with your servicer to change the terms of your loan to accommodate the missed forbearance payments. A modification might be right for you if you can no longer afford your regular mortgage payment because of a permanent change in your situation, such as long-term job loss. A loan modification would be, for example, if the servicer adds the missed payments to your entire loan balance, then recalculates your monthly payment, adjusting your loan term to bring your monthly payments to an affordable level. So instead of having 20 years until your mortgage is paid off, you might have 22 years to pay off your new loan balance. As you can see, your monthly payments may be lower, but it could take longer to pay off your loan, and you might have to pay more interest over the life of your loan.
The final typical option is the lump sum payment. It's just how it sounds—as soon as your forbearance period ends you repay all of your missed payments in one payment. So, let's say your servicer offers you forbearance to pause your mortgage payment for three months. With a lump sum repayment agreement, in month four, you pay your normal mortgage payment plus the payments you paused. So, if your mortgage payment is $1,000 a month, in month four when your forbearance ends, you will pay $4,000. [That’s] $1,000 for your normal monthly payment and $3,000 to repay the payments you skipped. After that, your monthly payment will go back to the normal amount. If you have the money to make the lump sum payment this can be a simple option for getting back on track. However, many borrowers may not be able to afford the higher payment. If that's the case for you, ask your servicer about other options. Remember, if you have a federally backed mortgage you will not be required to pay your forbearance payments back in the lump sum.
Those are a lot of options, but not all may be available to you. It's important to work with your servicer to understand the process, consider your next steps, and understand the best option for your circumstance. For help talking to your mortgage servicer, or understanding your options, or if you are worried about foreclosure, contact a HUD-approved housing counseling agency in your area.
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Know your options when exiting forbearance
Generally, there are a few ways borrowers can make up their missed payments. However, the method of repayment can vary depending on your loan. Not all borrowers will be eligible for all options. Ask your servicer about what options are available to you.
If you are concerned about losing your home, contact a HUD-approved housing counseling agency. They can help you figure out your options and guide you through the paperwork and process of working with your servicer. Find a housing counselor near you.
Remember, help is free. You don’t have to pay anyone to help you avoid foreclosure
This option might be right for you if...
You can resume your regular payments but can't afford to increase your payments.
How it works
These options will either move your missed payments to the end of your loan or put them into a subordinate lien repayable only when you refinance, sell, or terminate your mortgage.
This option might be right for you if...
You can no longer afford to make your regular mortgage payment.
How it works
Your payment can be reduced to an affordable amount and your missed payments will be added to the amount you owe. Your monthly payments could also be lower, but it could take longer to pay off your loan.
Repayment options vary by agency
Just as mortgage forbearance may differ between the federal agencies, Fannie Mae, or Freddie Mac, so does the repayment of the amounts that were suspended during the forbearance. The following information provides some of the specific repayment options offered by each agency.
Homeowners with mortgages owned or guaranteed by Fannie Mae or Freddie Mac may be eligible for different repayment options following your forbearance. Fannie Mae and Freddie Mac do not require a lump sum payment at the end of the forbearance
- If you are unable to repay your missed payments all at once and can afford to pay a higher monthly mortgage payment for a period of time, you may be eligible for a repayment plan, which allows you to repay past due amounts over a period of time.
- If you can afford to resume your regular monthly mortgage payment you may be eligible for a , which puts your missed mortgage payments into a payment due at the sale or refinancing of your home, or at the end of the loan.
- If you have a sustained reduction in income and are unable to afford your regular monthly mortgage payment, you may be eligible for a loan modification which changes the terms of your loan to enable an affordable payment.
Servicers will reach out to you about 30 days before your forbearance plan is scheduled to end to determine which assistance program is best for you at that time. Work with your servicer to determine which option you are eligible for.
does not require lump sum repayment at the end of the forbearance. Homeowners on special COVID-19 Forbearance will be assessed by their servicer first for eligibility for FHA’s COVID-19 Recovery Standalone Partial Claim home retention option no later than at the end of the forbearance period.
The COVID-19 Recovery Standalone Partial Claim is for homeowners who can resume making their current monthly mortgage payments in the future. The COVID-19 Recovery Standalone Partial Claim places amounts you owe into a subordinate lien that is repaid only when you refinance your mortgage, sell your home, or your mortgage otherwise terminates. This lien does not accrue interest.
If you cannot resume making your existing monthly mortgage payment, servicers of FHA-insured mortgages will assess you for the COVID-19 Recovery Modification. The COVID-19 Recovery Modification extends the term of the mortgage to 360 months at a fixed rate and targets reducing the monthly principal and interest portion of your monthly mortgage payment.
If you can resume making regular payments your servicer or lender should either offer an affordable repayment plan or term extension to defer any missed payments to the end of the loan. If you are unable to resume making regular payments, your servicer or lender should evaluate you for all available loss mitigation options.
Upon completion of the forbearance, the lender shall communicate with the borrower and determine if the borrower is able to resume making regular contractual payments. If so, the lender shall offer the borrower a written re-payment plan to resolve any amount due or, at the borrower’s request, extend the loan term for a period that is at least the length of the forbearance.
VA has a suite of loss mitigation options such as repayment plans and loan modification to assist borrowers in repaying payments missed under a CARES Act forbearance. In addition, VA is continuing to evaluate other options to further assist borrowers affected by the novel coronavirus (COVID-19) national emergency.
Native American Direct Loans (NADL) are managed by BSI Financial Services. NADL borrowers can request a forbearance plan by contacting the BSI default resolution team at 800-327-7861 or firstname.lastname@example.org.
Check with your loan servicer for the forbearance repayment options that they offer. You may be able to find information about forbearance programs by checking the websites of your lender and servicer for more detailed information. Be sure to inquire about what limitations, options, and fees may apply to repayment of your loan due to the fact that it is not federally backed.
Get expert help
Talk to a housing counselor
For help talking to your mortgage servicer or understanding your options, contact a HUD-approved housing counseling agency in your area. Housing counselors can develop a tailored plan of action and help you work with your mortgage company, at no cost to you.
Talk to a lawyer
If you need a lawyer, there may be resources to assist you, and you may qualify for free legal services through legal aid. If you’re a servicemember, you should consult with your local Legal Assistance Office.
Submit a complaint
If you have a complaint with your mortgage or forbearance plan, tell us about your issue—we'll forward it to the company and work to get you a response, generally within 15 days.