If you need help making mortgage payments because of the coronavirus, the recent bailout bill provides some help, see my previous post. But beware, you might have to repay money very soon that you were allowed to not pay during a forbearance (suspension on payments). At least one mortgage servicer said that for people who get a 90-day forbearance, they will need to repay that money within 90 days after the forbearance. This is a very good reason to not get a mortgage forbearance if you can afford to pay your mortgage. If you don’t need a forbearance but are given an automatic one, such as the 90-day California forbearance that most of the big banks have agreed to, either pay your mortgage anyway, or put that money aside and repay it once the forbearance ends.
If you get a forbearance, you may negotiate repayment if your mortgage servicer does not demand repayment on its own terms. If you cannot afford to repay it or to make larger mortgage payments as part of a repayment plan, the best solution is a deferral. A deferral would add the delinquent money from the forbearance to the end of your loan, so that you would either extend the time for repaying the mortgage by the number of months you didn’t pay during the forbearance, or you would have a balloon payment in the final month of the mortgage that would include the normal monthly payment plus the amount owed from the forbearance.
The takeaway from all this is, don’t apply for or accept a forbearance if you don’t need one. If you are given a forbearance without requesting one, either refuse it and pay your mortgage or, if you are forced to accept it, put the money aside and repay it immediately after the repayment. If you need a forbearance, try to negotiate a deferral where you are allowed additional months to complete your mortgage payments.