Published on May 20, 2021
Written by The Servion Group
Here at Servion, our servicing department fielded hundreds of inquiries for COVID-19 assistance, ultimately processing and completing over 1,900 forbearances and deferments. As more and more borrowers are reaching the end of their COVID-19 relief programs, what lies ahead for them?
Borrowers exiting COVID-19 forbearances in the current environment will likely have a mix of post-forbearance options that include traditional loss mitigation options and unique COVID-19 programs developed by the investor/insurer. A list of common post-forbearance options/pathways and a brief description of each is included below. Of course, the types of options and specific terms available to any one borrower will depend on loan type, local laws and investor/insurer requirements.
The borrower pays back all payments that were missed under the forbearance plan. After the reinstatement, the borrower continues to pay his or her contractual payment under the original terms of the loan.
The borrower resumes making his or her regular monthly payments, plus an additional portion of the missed amount each month, until the missed amount is paid off. Repayment plans can vary drastically in length and amount.
Missed payments and, in some cases, other amounts (e.g. servicing advances paid to third parties) are deferred to the maturity date as a non-interest-bearing balance. The deferred amount is due on the maturity date (or earlier whenever the home is sold, or the loan is refinanced or otherwise paid off). Once the deferral is processed, the borrower resumes making his or her regular contractual monthly payment.
The terms of the mortgage loan are modified to reach an affordable payment solution for the borrower. Loan modifications can take many forms but typically include capitalization of arrearages, a reduction in interest rate and/or a term extension.
Whether you are a borrower whose loan is serviced by Servion or you work at one of our partner financial institutions and have questions, you can contact our servicing department for help. Our phone number is 1-800-766-5626 or you can use this page of our website to find the email address to which you can send your questions.