Lending Experts: Get Details Before Skipping Mortgage Payments

Apr 27, 2020, 8:15 PM | Updated: 9:21 pm

SALT LAKE CITY, Utah – Don’t skip mortgage payments unless absolutely necessary, lending experts warned on Monday as concern and confusion pile up about potential consequences of forbearance programs.

Because of the pandemic emergency, those with federally-backed home loans can request forbearance — which can pause or reduce payments for a limited period of time.

“A forbearance does not mean that those payments aren’t due,” said Jeremy Holmgren with Zions Bank.

With nearly 100,000 Utahns currently on unemployment, many are seeking relief from their biggest monthly bill. But Holmgren said to make sure you understand how missed payments will be repaid.

“They will be due at the end of the forbearance period,” he said. “So, for example, if you’re in a 90-day forbearance on that fourth month, all four payments will be due at that time.”

Instead of a forbearance, Holmgren said Zions Bank is offering payment deferrals on the mortgages the bank owns. That allows payments to be tacked on to the end of the loan.

“At the end of the loan, you have three months added on to it,” he said. “And at that fourth month, you are back on schedule with the normal payment and no harm, no foul.”

Mortgage giants Fanny Mae and Freddy Mac responded to the repayment concern on Monday, saying there will be several options for paying back the missed payments on loans owned by the companies.

“Simply put, if you are a homeowner seeking forbearance and Freddie Mac owns your loan, you are never required to make up missed payments in a lump sum,” said Freddie Mac CEO David Brickman in a statement.

However, it’s not clear what the other options will be.

“Mortgage servicers will attempt to contact homeowners 30 days before their forbearance plan is scheduled to end to determine which assistance program is best for them at that time,” Fannie Mae said in a statement.

Another concern with forbearance programs: negative impacts on a borrower’s credit report since a forbearance will be reflected in the payment history on the loan.

“There could be some consequences at the end of that three months,” said Justin Bundy with Heritage Home Loans in St. George.

Bundy has been sounding the alarm about the problems with forbearance programs, advising people to avoid them if possible.

“I know that won’t be possible for everyone,” Bundy said, “but if you can reach out to a family member or reach out to the bank and say, ‘Is there any other way to make this happen for this time being rather than that forbearance?’”

At the end of the forbearance period, Bundy said some borrowers might need to modify their loans in order to catch up on the missed payments. Such modifications can also be viewed negatively by future lenders when assessing creditworthiness.

Before agreeing to any relief program for your mortgage, Bundy said to ask the loan servicing company about possible negative credit reporting and how skipped payments will be handled.

KSL 5 TV Live

Top Stories

Coronavirus Utah

Ashley Moser

Utah family hasn’t seen father in nearly 1,000 days due to COVID-19 travel restrictions

“None of us were expecting to not see him three years later,” a daughter shares how her Father remains in China.
2 days ago
ATLANTA, GA - UNDATED:  This undated handout photo from the Centers for Disease Control and Prevent...
Jed Boal

U of U researcher joins international team to confirm specific origin of COVID-19

New research released Tuesday confirmed the origin of COVID-19. A University of Utah Health and an international team of researchers found that the earliest cases of COVID-19 in humans emerged at a wholesale fish market in Wuhan, China in December 2019.
17 days ago
Only 50% of Utans are vaccinated and cases are surging because of the Omicron variant BA.5. FILE PH...
Jed Boal

BA.5 variant driving new surge of Utah COVID-19 cases

President Joe Biden’s positive Covid case Thursday was a sober reminder that Utah is not done fending off COVID-19 in many communities.
22 days ago
(File) Intermountain Healthcare Faculty in Murray....
Jed Boal

COVID-19 hospitalizations doubled, but mortality rate is low

Hospitals see an uptick in COVID hospitalizations due to a new infectious variant that is less lethal but more transmittable.
1 month ago
Intermountain Medical Center in Murray (KSL TV)...
Jed Boal

Researchers: Intermittent fasting provides protection against severe COVID-19

Doctors at Intermountain Healthcare have researched the health benefits of intermittent fasting for nearly a decade. Their latest discovery: intermittent fasting helps protect against severe COVID, but it is not a replacement for vaccination.
1 month ago
The Nurse Crisis and Patent Risk....
Debbie Worthen

Utah registered nurses are leaving the field, creating the ‘perfect storm’

"Without nurses, we can't have hospitals." Utah nurses are overworked and underpaid. Some say it's put people at risk.
2 months ago

Sponsored Articles

tips how to quit smoking...

7 Tips How to Quit Smoking | Quitting Smoking Might be One of the Hardest Things You Ever Do but Here’s Where You Can Start

Quitting smoking cigarettes can be incredibly difficult. Here are 7 tips how to quit smoking to help you on your quitting journey.
Photo: Storyblocks...
Blue Stakes of Utah 811

Blue Stakes of Utah 811: 5 Reasons To Call 811 Before You Dig When Working in Your Yard

Call before you dig. Even at home, you could end up with serious injuries or broken utilities just because you didn't call Blue Stakes of Utah 811.
Days of...
Days of '47 Rodeo

TRIVIA: How well do you know your rodeo? Take this quiz before you go to the Days of ’47!

The Utah Days of ’47 Rodeo presented by Zions Bank is a one-of-a-kind Gold Medal Rodeo being held July 20-23, 25 at 7:30 PM. The Days of ’47 Rodeo How well do you know your rodeo trivia? Take the quiz to test your know-all before heading out to the Days of ’47 Rodeo at the […]
cyber security through multi factor authentication setup...
Les Olson IT

How multi factor authentication setup helps companies stay safe

Multi factor authentication (MFA) setup is an important security measure that every company should implement for their workers. It’s also wise to install it for your personal and home accounts.
Lighting Design

Check out these stunning lamps with stained glass shades

Lamps with stained glass shades are statement pieces that are more than simply aesthetic. They also meet a functional requirement: to light up a room.
Address Bar of internet browser shows internet access...

Utah voters 50+ support increased access to Internet

The AARP surveyed Utah voters aged 50 plus about internet access and if they support the expansion of broadband, especially in rural areas currently lacking it.
Lending Experts: Get Details Before Skipping Mortgage Payments