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Mortgage Forbearance FAQ

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With the economy and the housing market in turmoil due to the global coronavirus pandemic, one of the biggest buzzwords surrounding finance is forbearance. Forbearance of loan and mortgage payments can help borrowers weather the financial crisis while they get back on their feet, but there may be lots of questions surrounding what forbearance means and how it can help. Read on to learn the answers to some frequently asked questions surrounding forbearance so you can make the right financial decisions for you.

What is loan forbearance?
Simply put, a loan forbearance means that your lender or creditor will allow you to postpone repayment on a loan or debt. This means that borrowers may be able t delay making their payments during a financial crisis without incurring late penalties or other legal penalties that usually come with late or missed loan payments.

What is a mortgage forbearance?
A mortgage forbearance is the same as a loan forbearance, but as it applies to repayment of your home loan. Many homeowners who find themselves out of work, temporarily or not, or who are facing other financial constraints may seek a mortgage forbearance agreement with their lender. Under this agreement, the lender agrees not to impose legal penalties on the borrower, including foreclosure, while loan payments are delayed, reduced or stopped altogether for the duration of the agreement. However, interest still accrues for the borrower during this period.

How is forbearance different from forgiveness?
With mortgage forbearance, the borrower is allowed to delay payment for a set amount of time without facing legal consequences, and this agreement is often used in times of financial stress on a large scale. Loan forgiveness, however, means that the lender or creditor has made the decision that the loan no longer needs to be repaid. No more payments would need to be made on the loan, which is now considered paid in full. .

How do I get mortgage forbearance?
If your income has been reduced or stopped due to the coronavirus pandemic, there may be help available through the CARES Act. Learn whether your mortgage would qualify for forbearance, what the application process is and more at the Consumer Finance Protection Bureau.

During these unprecedented times, the North Carolina Housing Finance Agency remains dedicated to financing housing opportunities for North Carolinians statewide whose needs are not met by the market. To learn more about home buying, home ownership and more, visit