05/13/2021
In Mortgage Forbearance? Here’s What You Need to Know
By Ron Hurtibise
After forbearance, owners can pick up where they left off, but the return process can be complicated. Both South and Central Fla. have a large number of these owners.
FORT LAUDERDALE, Fla. – Mortgage servicers took their sweet time last spring advising customers affected by the pandemic about their right to hit the pause button on making payments with no documentation required, and no penalty charged to get back on track.
Now that most of those borrowers are preparing to resume making payments, mortgage servicers are again facing criticism for not being straight with their customers about their options for resuming payments when their forbearance period ends.
And that’s potentially troublesome for South Florida and Central Florida, where rates of mortgage borrowers allowed to skip payments through a process called forbearance exceed state and national averages, and are disproportionately high among Black and Hispanic homeowners in low-income neighborhoods.
Because those borrowers typically have less equity to work with, consumer advocates say they will need to take the initiative to work out a payment resumption plan with their mortgage servicers – which include traditional banks and payment processors that aren’t banks. If they’re not satisfied with the answers they get, help is available from volunteer legal aid organizations and federally funded housing counselors.
“This is often very complicated stuff,” said Mike McArdle, assistant director of mortgage markets for the Consumer Financial Protection Bureau (CFPB). “What is a deferral? What is a modification? What are term extensions? It’s important for borrowers to understand what is going on with their loans.”
Kim Henderson, president and CEO of Neighborhood Housing Services of South Florida, one of the area’s federally certified housing counseling providers with offices in Miami and Fort Lauderdale, said her organization hasn’t see an uptick in requests for help yet – probably because the Biden administration extended the forbearance period through Sept. 30 and the foreclosure moratorium through June 30.
“It’s coming, but not yet,” Henderson said. “We’re preparing. It’s one of those things that people won’t worry about until it hits them in the face that the party’s over.” When that happens, she says, her organization and numerous others will be ready to help, she said.
