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Rachel LaMar, J.D.
Broker, Attorney, Owner
LaMar Real Estate
Rachel@LaMarRealEstate.org
Cellular 760-310-9466
CA BRE# 01399682

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News, Views and Opinions on Real Estate, Law and the North San Diego Community

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Rachel LaMar, J.D.
Broker, Attorney, Owner
LaMar Real Estate
Rachel@LaMarRealEstate.org
Cellular 760-310-9466
CA BRE# 01399682

News, Views and Opinions on Real Estate, Law and the North San Diego Community

UPDATE: BEWARE BEFORE YOU FORBEAR

This is an update to the last blog I posted on mortgage forbearance in this time of the Coronavirus…here are some VERY important updates if you are considering mortgage forbearance:

1. Affected credit scores – while federally backed loan borrowers are eligible for forbearance due to hardship suffered as a result of the pandemic, credit scores CAN BE AFFECTED. Originally we were told that this was not the case, but the federal government has no control over whether the lenders are reporting missed payments to the credit bureaus, and people are seeing them pop up on credit reports.

2. Affect on Future Loan Applications – Forbearance approval, or EVEN APPLYING FOR FORBEARANCE, can have a detrimental effect on future loan applications for a long time. Lenders in the future can ask you, upon applying for a loan down the road, if you have ever been approved for or applied for mortgage forbearance…this can ruin your chances of being approved for a future loan, EVEN IF you never missed a payment.

3. Forbearance can prevent you from being able to refinance your loan! Lenders are NOW alerting mortgage professionals that those who have initiated forbearance cannot refinance, and there is no expiration date indicated. One big lender stated “The following guidance is effective immediately. Any loan currently in forbearance or for which forbearance has been requested is not eligible for refinance.”

As mentioned in the last blog and also on my Instagram, Facebook page and LinkedIn feeds, this information is changing almost daily. BE SURE TO CHECK WITH YOUR LENDER and mortgage professional before you consider applying for forbearance. You may have better options, such as refinancing with cash out, or rolling other debt into a new loan to free up some monthly debt. While forbearance IS an option there are risks, and to me it looks much like the mortgage workout plans that were prevalent during the 2008-2010 housing crisis, which had many detrimental affects on borrowers.

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