Mortgage is Coming Due For Many Who Took Forbearance

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That’s how many homeowners may have to resume making monthly mortgage payments in October as the first big wave of pandemic-era forbearance plans expires.

Homeowners who sought the first opportunity to suspend their mortgage payments under COVID-19 forbearance—entering in March 2020 and skipping their payments starting the following month—will have used up all the time available and must resume payments in October. (Thanks to special programs offered by government and private mortgage-holders, borrowers could hold off from payments for a maximum of anywhere from six to 18 months, depending on when they entered forbearance and who issued their loan.) 

The 415,000 who are back on the hook starting in October represent the largest chunk of the 1 million-plus who are set to leave forbearance before the end of the year, according to an analysis by real estate data company Black Knight earlier in September. That’s out of 1.75 million loans that were in forbearance as of mid-August.

Although a federal foreclosure moratorium expired at the end of July, prompting the Consumer Financial Protection Bureau to create special temporary protections for borrowers, it’s unclear how many of those leaving forbearance will face foreclosure, even if they’re still not in a financial position to resume paying their loans, according to a recent analysis by real estate firm Zillow. That’s because the rapidly rising home prices over the last year mean that many will be able to sell their homes and pay off their outstanding debt and still walk away with some money.

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