What is Loan Forbearance?

Loan forbearance is an option that is available for homeowners who are facing a short term, temporary financial hardship or crisis. This is NOT debt forgiveness and the homeowner will need to eventually repay any loan assistance provided from forbearance. It is not a long term solution. 

In order for a forbearance to be offered to you, your personal financial hardship situation needs to be temporary and have some type of resolution in the not so distant future. Some examples would include; if you have a short term illness (or are caring for someone with an illness) that causes a reduction in your household income, but has an end date in sight; if you are unable to live in your home or return to work due to a natural disaster, such as a flood, and you are waiting for an insurance payment. A third example would be with a weak economy or natural disaster when some homeowners have had their work hours cut back, suspended or eliminated. These are a few examples of when HomeOwnership Lending would consider offering you forbearance. 

Terms of HomeOwnership Lending’s Loan Forbearance Program 

The primary goal of forbearance from HomeOwnership Lending is to help homeowners get their home loan payments suspended or reduced for a short, defined period of time. The initial period of forbearance offered by HomeOwnership Lending is 90 days, or 3 months. The 90 days will begin on the date specified in your approval notice. 

In order to be eligible for HomeOwnership Lending’s Forbearance Program, you must call or email us to discuss your financial situation, and you will need to send us a completed Hardship Application. We will review your application and send you a letter outlining the terms of the forbearance agreement and specifying the beginning date of the forbearance term. Once approved you will not have to make monthly loan payments for the forbearance term and you will not be charged late fees for this term. However, all principal and interest payments will become due at the end of the forbearance term. The term of forbearance will begin on the date HomeOwnership Lending was made aware of your hardship and will apply only to payment obligations during the forbearance term. No late fees or penalties will be charged during the term. Delinquent payments that were due prior to the beginning of the forbearance term will not be included. However, late fees will not accrue on prior outstanding balances during the forbearance term. At the end of the forbearance term, HomeOwnership Lending will consider your future repayment schedule on a case by case basis. 

Remember, if you agree to the Forbearance Program terms offered by HomeOwnership Lending, you will be required to repay any past due amount and you will resume paying principal and interest for the remainder of your loan. 

For updates, information and forms, please visit us at www.homeownershiplending.org