What is Mortgage Forbearance?

COVID-19 has affected all of our lives in one way or another, including our finances. For those experiencing a job loss due to the COVID-19 pandemic, we would like to extend help during this difficult time. Colonial is working with federal agencies and your Investor to make programs available to our borrowers on a case-by-case basis. Please know that program requirements and terms may vary depending the Investor on your loan.  Please contact our Servicing department to learn more about what options are available to you.

Mortgage Forbearance

Mortgage Forbearance is a payment solution that allows customers to temporarily pay a lower amount on their mortgage or pause their mortgage payments for up to six months without the threat of foreclosure or having a negative impact on a borrower’s credit. The investor, federal agency and borrower’s unique situation are all factors considered when determining mortgage forbearance options.

Reasons for Mortgage Forbearance

  • Loss of employment
  • Decline in income
  • Illness and unable to work
  • Caring for a sick family member and unable to work

After the Forbearance Period

At the end of the Mortgage Forbearance period, all payments not made are required to be paid back. Below are three options borrowers have to pay back funds, and are subject to investor requirements and may differ from Investor to Investor:

  • Lump Sum Payment: The simplest option for borrowers is to make any deferred mortgage payments in one lump sum at the end of their forbearance. We understand this may be difficult if the borrower has experience loss of income or employment.
  • Repayment Plan: Some borrowers may qualify for a repayment plan, which allows borrowers to pay an extra amount each month until the amount owed for the forbearance is met.
  • Loan Modification: On a case-by-case basis, Colonial may allow a borrower to modify their loan, which will likely restructure the interest rate and term of the loan to make forbearance repayment possible.

Contact Colonial to Review your Options

We understand the massive impacts COVID-19 has had in our communities, across the country and around the globe. Colonial is working closely with federal agencies to offer options for borrowers who are being most affected. If COVID-19 has affected your ability to make your mortgage payment, we are here to help. Please call us at 800-937-6303 or 800-937-6002 or you can send a secure message through our website at www.servicehomeloan.com and one of our dedicated specialists will assist you.

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3 Responses to “What is Mortgage Forbearance?”

  1. Jephrie Smith says:

    I had to quit my job to be at home with my kids. They are also cutting hours at work. We will have less income and need to defer one payment to help us get back on our feet.

  2. Charles R. Webber says:

    I was told I was approved for this Forbearance? What do I have to do now to prove I needed this. This is the only thing saving me now. Please tell me what I need to go forward.

  3. Donna Carnes says:

    According to Federal Care Act and Fannie Mae forebearance payments. an be put at end of mortgage. Also in message first received it stated five days now it is ten days.

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