What is a mortgage forbearance, and how does it work in Idaho?

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by hermina , in category: Real Estate , 7 months ago

What is a mortgage forbearance, and how does it work in Idaho?

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1 answer

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by jeanie , 5 months ago

@hermina 

Mortgage forbearance is a temporary arrangement between a homeowner and their mortgage lender or servicer, which allows the homeowner to pause or reduce their mortgage payments for a specific period of time. During this forbearance period, the borrower is not required to make their regular mortgage payments.


In Idaho, mortgage forbearance works similarly to other states. Homeowners in Idaho who are facing financial hardship, such as job loss, reduced income, or other circumstances that make it difficult to pay their mortgage, can contact their mortgage servicer and request forbearance.


The process usually involves contacting the servicer, explaining the financial hardship, and providing any necessary documentation to support the request. The mortgage servicer will then review the situation and determine if the homeowner qualifies for forbearance. If approved, they will outline the terms of the forbearance plan, including the length of the forbearance period.


During the forbearance period, the homeowner does not need to make their regular mortgage payments. However, it's important to note that the skipped payments are not forgiven but deferred. This means homeowners will still be responsible for the missed payments but may have several options for repayment.


The repayment options after the forbearance period can vary depending on the agreement reached with the mortgage servicer. Some common options include:

  1. Lump Sum Payment: Homeowners may have the option to repay the missed payments in a lump sum at the end of the forbearance period.
  2. Repayment Plan: The servicer and homeowner can agree on a repayment plan to spread out the missed payments over a specific period, in addition to the regular monthly payments.
  3. Loan Modification: In some cases, the mortgage terms can be permanently modified to reduce the monthly payment, extend the loan term, or add missed payments to the end of the loan.
  4. Refinancing: If the homeowner's financial situation has improved, they may consider refinancing their mortgage to incorporate the missed payments and potentially lower the monthly payment.


It's important for homeowners in Idaho considering mortgage forbearance to contact their mortgage servicer as soon as they experience financial hardship. Open communication and understanding the available options can be crucial in navigating the forbearance process and finding the best solution for each individual's situation.