Partner Andrew Demers discusses mortgage forbearance and payment terms in a recent Bankrate article titled “Everything you should know about mortgage forbearance.”
As the coronavirus continues to jolt the economy, more than 3.4 million Americans are in mortgage forbearance plans, which allows them to pause payments for a month to as long as a year. “The only situation in which the loan interest might change is if the lender extends the loan maturity date or increases the loan interest rate,” Drew said. He points to three key questions borrowers should ask.
- Do I have to pay interest or escrow advances during this time, or is this a complete payment deferral?
- Is the loan maturity date being extended?
- Will the lender recapture the deferred through a balloon payment at loan maturity, an extended maturity date, or some other catch-up method?
“A deferment agreement is a modification and amendment to the loan documents, which requirements a clear understanding of the parties’ respective rights and obligation,” he explains.
Click here to view the full article.