THE MORTGAGE FORBEARANCE PROGRAM IS COMING TO AN END
Cathy Baker of Baker Mortgage explains. "The purpose initially of the forbearance program was a result of the pandemic. There were so many people who had lost their jobs that it was a way for people who needed some time or a little bit of relief could postpone their payments." Baker says it has helped people in trouble - but there's a problem. "The problem with it is the large majority of people who applied for the program really didn't need it. So - like anything else - in the end some ways it's going to come back and bite 'em!" Interest is still due on the months home owners didn't pay. Mortgage Lenders are warned to avoid foreclosures by making their clients aware of their options going forward.
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Over 2 million home owners missed or postponed mortgage payments under the covid-related government-authorized forbearance plan. The plan ends in September and Baker says it's time to pay the piper. "There is no free lunch. That money that they are not making payments on - they are still going to have to pay interest on." Baker says the Consumer Financial Protection Bureau wants to avoid a flood of foreclosures on the home-owners who really needed the help." The lenders need to let people know what their clients' options are. And if they don't have proof that they have done that then the regulators in the CFPB will come back later and fine them all kinds of money."
Hundreds of thousands of people may need help getting back on track and avoid foreclosure.
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