With unemployment on the rise and business shutdown in New Jersey and New York , more people are considering putting their mortgage payments into forbearance. A mortgage payment in forbearance means delaying the payments without penalty fees after giving notice to the creditor. When the unemployment checks run out in July and late August, many people will be drawn to this option in order to prioritize other bills such as car payments, credit card payments, or even student loan payments which are due by late summer for federal borrowers.
However, a debtor putting their mortgage into forbearance will only provide short term relief for a long term issue. The mortgage payments will only be delayed for 90 days before they are due again, and with incurred interest since forbearance does not freeze interest rates. Also, with so much short staffing in businesses still operating around the country, there are likely to be complications properly adjusting a debtor’s mortgage plan in their system. If the bank or lending institution’s software was not updated to cater to the demands of covid-19, then likely irregularities and inaccurate accounts such as late charges, suspense issues, ongoing loan modifications may occur.