Every Monday Morning at 8:15am, join me on my Facebook page as I sit down with a local lender, and do a live interview and talk about a Mortgage Tip that may help YOU with your next Real Estate Purchase. 

This morning I sat down with Justin Froiland from Fairway Mortgage. Listen as Justin gives a brief explanation of loan forbearance during a pandemic.  You can reach Justin at 605.695.1429 or justin.froiland@fairwaymc.com.  His office is located at 412 5th St., Brookings SD 57006 or on the web at www.BrookingsMortgage.com 

Loan Forbearance during the Covid-19 Pandemic


- Good morning everybody, Shane Andersen here from the Brookings Home Team, powered by Century 21. Still coming you from my man cave, so to speak here, and got Mr. Justin Froiland over here at Fairway Mortgage not coming from your office, but a location where we're kind of used to right now, our homes.

- Right, right.

- So, this is two times in two weeks here Justin, thanks for jumping on here. I know last week was not your scheduled time but this week is, and you were gracious enough to jump on twice now and during this time frame, so thank you for doing that. Wanted to, you know, we were talking before we jumped on here, in the last day or two, kind of what we wanted to talk about, and with today's situation and people maybe having some tough times, being able to pay their mortgage and stuff there's a lot of lenders out there offering what they call a forbearance program. Am I saying that right? Forbearance?

- Uh, forbearance.

- Forbearance, yes. Forbearance, I've heard it enough times, you'd think I'd remember that.

- Right, right.

- But, forbearance program, and I asked Justin to kind of jump on here and give his opinion, maybe some ideas and stuff on, if you are in this type of situation, maybe some ideas to help you with that. What it all basically boils down to guys, is you just got to check with your lenders, and see what's available. This is kind of a high level explanation of forbearance and kind of how that works in this time, that we need. So, Justin. I'll stop talking, but thank you again for jumping on.

- Yeah, no problem, thanks for having me again Shane. And, yeah I think the topic of forbearance is definitely a good one to go over right now. Like you said with everything that's going on, and so, I wanted to just kind of explain what a forbearance is, so everybody understands that. And notice I said forbearance, and not free bearance, because there is a some what of a misconception out there about that. So, I think the easiest way is to just give you an example. So, let's say that your mortgage payment is $1000, and let's say you lose your job or affected by this COVID-19, to the point where you could potentially take advantage of this forbearance that your servicer, or person who you're making your mortgage payments to, is offering. They're offering protection up to a six month forbearance, and so, let's say your mortgage payment's $1000 a month, and you go and you take advantage of that for six months, and end up not having to make your mortgage payment. Well, then come month seven, your servicer is going to expect you to pay the $6000 that you owe him from the back payments, plus that new mortgage payment, so, they're going to expect you to write a cheque for $7000, essentially. You know, most people, probably not able to do that, especially after you're coming off of not working for six months. And so, so they can see where that's kind of going. The other option that a lot of servicers will probably give off there at that point is give you a different option where they say, "Okay well, you won't have to pay this all at once, but we're going to split this up, and increase your monthly payment by $500 for the next 12 months, to repay that backed amount. Well more than likely, you probably can't afford that extra 500 bucks a month either, if you're just, again, coming off of not working. And, so then, a lot of times, the third option that they'll resort to, is what's called a loan modification, again, not an ideal situation for the client or for the borrower because that is something that can potentially, will potentially negatively impact your credit. There may be some fees associated with it, that that lender will charge, and to modify the terms of that loan, and adjust that, that could potentially affect, you know, your credit, so if you're looking to buy a new house in the near future, or refinance or anything like that, it could put a kibosh on that. And so, so that's just, just like to make sure people understand that just cause you're not having to pay that money for that six months time period, doesn't mean it's going to go away. You're not just going to write it off and forget about it, type of deal unfortunately. So, just wanted to kind of spend a little bit of time explaining that so people understand it. Long story short, if you can make your mortgage payment, please make your mortgage payment. This program's put out there for people who truly can't make it, and so you'll have to get those unemployment, and those, that stimulus check, and you know, if it's still not enough to make that mortgage payment then by all means take advantage of this program. But, use it as a last resort to some extent.

- Yep, exactly. You, yeah, every lender like we said is different on how they handle that, it could negatively impact your credit rating, and, you know, just, like you said, bottom line, check with the lender, see what they have available for you and see if it's gonna work for you.

- Yeah, and I would say Shane, the best place to look right now because you can imagine these lenders and these servicers are getting bombarded with phone calls and so, I would strongly recommend going out to their website, to your servicer, to the person who you make that monthly mortgage payment to, go out there to their website, and I can't almost promise you that there will be some information right there, readily available regarding how that specific servicer handles this situation.

- You bet, you bet. I've seen a few of those on some different websites. It is a hot topic now, and that's why we wanted to talk about it. They are aware of it, and hopefully it's just temporary. Alright, any thing else you want to add before we...?

- No, no. I think that pretty well sums it up, rates are in still great shape like we've talked about in the past and so, so yeah, as crazy as things are out there, it seems to still be moving and shaking in our world.

- In our world it is, you betcha. Alright Justin, thanks again for joining me this week, appreciate it. If you have any questions for Justin, as normal, his information is on the top, on the bottom, on the sides, wherever your device allows you to see that, even though this is not live, it is still information that hopefully you can use down the road, and get ahold of him if you have questions for that or anything else, so, alright well we'll be hopefully back next week with a new topic. Till then, stay safe guys, stay safe Justin.

- I'll do my best. Thanks Shane.

- We'll talk to you guys later, see you later.


Thinking of selling and/or moving to Brookings, Volga, or any surrounding areas? Got questions? I’m here to help! Visit BrookingsHomeTeam.com for more details!

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