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What Happens When Forbearance Ends for Floridians

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Here in Florida, thousands of families have been able to experience some relief from their monthly mortgage obligations with forbearance under the CARES Act. But soon that forbearance period will be ending and homeowners will have to make some decisions about what to do next.

As a temporary relief program, forbearance allows you to suspend payments for a period of time or arrange for a reduced mortgage payment, but it is not loan forgiveness. At the end of forbearance, you will be responsible for paying back any missed payments. Here are some important things to know when the forbearance period ends.

What to expect when forbearance ends for Floridians

As you near the end of your forbearance period, you and your lender will be in contact about what steps to take next. When forbearance ends, you will have to come up with a plan for repaying your delinquent payments, and there are many options.

During forbearance, you will not be accruing additional interest or incurring fees or penalties on your loan, but you will be responsible for the payment amounts you missed. Here are some options for repayment:

  • Mortgage reinstatement – pay down the missed payments in one lump sum to restore the loan to its original condition prior to forbearance.
  • Repayment plan – negotiate a repayment plan with your lender to spread out your missed payments over a set period of time. These additional payments would be added on to your existing mortgage payments.
  • Payment deferral – different from a repayment plan in that rather than spreading out missed payments and adding them to current payments, they get tacked on to the end of their mortgage term without accruing any additional interest or late fees.
  • Loan modification – a mortgage modification is a change to your existing loan terms and could include changes to your interest rate, length of time for repayment, loan type or other modification.Forbearance is a good option for seeking relief during times of economic hardship. As you consider your options for repayment, you likely will have many questions. If you need help understanding your rights and obligations from a legal perspective, get in touch with us at Jacobs Legal at 305-358-7991.
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