Q: What is a forbearance plan?
A: A forbearance plan is a temporary suspension (or reduction) of your monthly mortgage payments intended to allow you time and flexibility to manage the financial challenges you are facing after the disaster. A forbearance plan is not forgiveness of any portion of the debt, and interest will be due on the missed payments.
Q: Am I eligible for forbearance?
A: If you have been directly impacted, either financially or due to extensive property damage from a recent natural disaster, you qualify for a forbearance plan of one to three months to help you recover during this challenging time. However, you will not automatically receive a forbearance plan, so it’s important that you contact Mr. Cooper at 866-319-2432 to initiate the forbearance plan.
Q: Is a forbearance plan right for me?
A: A forbearance plan may be helpful for you if you need a temporary breather from making your monthly mortgage payments until you get back on your feet. However, we are not able to tell you if a forbearance plan is right for you. If you are not sure, we encourage you to speak with your financial advisor or attorney before making that decision.
Q: Will the missed payments be added to the end of my loan?
A: No, the missed payments will not be added to the end of your loan. Once the forbearance plan has expired, the full amount that you did not pay during the term of the forbearance plan will be immediately due. At that time, you will either need to pay the full amount or contact Mr. Cooper to find out what options may be available to bring your account current.
Q: What happens during the forbearance plan?
A: As a result of not making your regular monthly payments, your mortgage will become delinquent. However, Mr. Cooper will not report the forbearance plan or the delinquency status of your loan to credit reporting agencies for the duration of the forbearance plan. In addition, you will not be charged late fees during that time. All other terms of your mortgage will remain unchanged.
Q: What happens at the end of the forbearance plan?
A: At the end of the forbearance plan, all the amounts you have not paid will be immediately due, in addition to your regular monthly mortgage payment. However, Mr. Cooper is here to help and will contact you before the end of your forbearance plan to discuss potential options to bring your account current. Of course, you can also call Mr. Cooper toll-free at 866-319-2432 any time before the end of the forbearance plan to review your options.
Q: What options will be available to me if I cannot pay the full amount of the missed payments at the end of the forbearance plan?
A: Options to bring your account current at the end of the forbearance plan are determined by the owner of the mortgage loan, not Mr. Cooper. We are focused on doing all we can to help our customers, but we cannot guarantee that you will be eligible or approved for any of the options described below, in which case you would be required to pay the full amount of missed payments at the end of the forbearance plan. However, the options that could be available include:
- Modification. A loan modification is a restructuring of the mortgage where one or more of the loan’s terms, such as the interest rate or number of months to pay, is extended to provide an affordable payment or to cure a delinquency. A modification to bring the account current after the forbearance plan has ended may result in all or some of the following:
- Conversion of an adjustable interest rate to a fixed rate
- A change to your interest rate
- Extension of the term of the loan
- A higher loan balance, if past due amounts and fees and costs are added to the unpaid principal balance
- Repayment Plan. A repayment plan allows you to make extra or partial payments in addition to your regular monthly mortgage payment to bring the account current as allowed by the owner of your loan, generally from two to six months.
Q: How will a forbearance plan impact my credit?
A: We will not report the forbearance plan or the delinquency status of your loan to credit reporting agencies for the duration of the forbearance plan. We are uncertain as to the impact of a forbearance plan on your credit score, particularly if you are current on your mortgage or otherwise have a good credit score. Credit scores are determined by the credit reporting agencies, not Mr. Cooper. Additionally, the suspension of the credit bureau reporting will continue only while the forbearance plan is in place. If you do not bring the account current at the end of the forbearance or enter into a workout plan to bring the account current, you will be reported as delinquent.
Q: How will a forbearance plan affect my mortgage insurance payments?
A: It depends on what type of mortgage insurance you have on your loan. Entering into a forbearance plan may extend the number of months you must pay on time to cancel your Private Mortgage Insurance (PMI) or FHA Mortgage Insurance Premium (MIP), as applicable. Please call us to discuss the pros and cons of entering into a forbearance plan.
Q: What if I am currently on a modification or other workout plan?
A: Your current plan will be cancelled. You may reapply for any of these options at the end of the new forbearance plan, but we cannot guarantee you will be approved. Entering into a forbearance plan could also impact your ability to receive incentive payments if you currently have a HAMP modification, as well as your ability to have principal forgiven if you currently have a principal forgiveness modification.
Q: How will a forbearance plan affect my ability to refinance my loan?
A: Entering into a forbearance plan could impact your ability to refinance your loan. We encourage you to speak with your Mr. Cooper loan officer.
Q: Can forbearance be offered for longer than three months?
A: It depends. Please call us one month prior to the end of your forbearance plan so we can determine what options are available to you. Please call Mr. Cooper toll-free at 866-319-2432 before the end of the forbearance plan to see if there is a workout option available to you.
Q: Why did I receive a billing statement if I’m on a forbearance plan?
A: We are required by law to send you a billing statement every 30 days.
Q: What if I am set up on AutoPay?
A: Your AutoPay will be cancelled. Once your forbearance period ends, please call us so that we can help you get Auto Pay set up.
Q: Why am I receiving documents/letters that indicate I’m delinquent?
A: As we noted above, while you are on a forbearance plan, you are not making the full monthly payments you originally promised to make, and thus you are delinquent. We are required by law to send you certain notices regarding your past due status. However, no late charges or negative credit reporting will occur during the forbearance plan period, but you will be delinquent until you bring the account up to date.
Q: Can I cancel the forbearance plan later if I decide I don’t want it anymore?
A: Yes, you can always cancel the forbearance plan before its scheduled end date. Just remember that when the forbearance plan ends, you will be immediately responsible to pay any payments you missed during the forbearance plan, or you can contact Mr. Cooper toll-free at 866-319-2432 to see if there is a workout option available to you.
Q: What if my financial situation changes?
A: If your financial situation changes during the term of your forbearance plan, please contact Mr. Cooper immediately to reassess your situation and discuss potential alternatives.
Q: What if I still have questions?
A: If you still have questions, we’re here to help. Give Mr. Cooper a call at 866-319-2432.