– Forbearance does not mean forgiveness. Hi, I’m Rich Barnes, owner-broker of Realty Experts in West Allis, Wisconsin. 53214 It’s important to understand what it is you’re signing. Let’s do some forbearance math. Cindy and John have a mortgage. It’s currently at $2,500 a month. John loses his job, gets laid off from work. John hears all the news about forbearance and how if you’ve been negatively affected by the current situation that the banks will have to work with you. Excited, John calls the mortgage servicer and inquires about the forbearance he’s entitled to. He’s so excited that just in one phone call, for now, he doesn’t have to make his payments for six months. This is where the craziness comes in. Now seven months later, John is back to work. And of course he wasn’t able to save any additional money when he was out of work during the forbearance period. The forbearance time frame of six months is now up and the servicer sends John and Cindy their bill. Cindy nearly falls over and dies because the bill shows that Cindy and John now owe $15,000 plus $2,500 and it’s all due right now in the seventh month. So $17,500 in total are due right now. Right, John is shocked. He calls the servicer and asks, why? Servicer: that’s six months of forbearance, $2,500 times 6, plus the current month of $2,500, totalling $17,500, they’re all due right now. John: Well obviously I haven’t been working, I don’t have that kind of money. I can’t pay that, is there anything I can do? Can we renegotiate? Servicer: sure, we can spread out the $15,000 over twelve months and add it to your regular payment. John: Great, thanks so much! How does that work? Servicer: Well, that’ll be $3,750 a month. John: I can’t do that either! Servicer: Sorry. John: Can I refinance? Servicer: No, because the loan went into forebearance and now you have an unsatisfactory recent mortgage payment history in the eyes of Fannie Mae and Freddie Mac’s current underwriting approval guidelines. John: What can I do? To sum this up: forbearance is not forgiveness! You still have to pay it back. Whether it’s the end of a few months or at the end of the lifetime of the loan, it will still have to be paid back. We need to make sure we are correctly giving out the information regarding forbearance. Please make sure you understand what you’re getting into. Just remember, there isn’t such a thing as free, as of right now, when it comes to forbearance. Please feel free to reach out to my team for any advice at all. Let us help you navigate through these tough times or guide you to the right person. Stay safe, I’m here to help. Thank you, have a great day.