Orla McCaffrey

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593 appearances 13 recordings 1 series first heard Mar 2020 last heard Jun 2022

Orla McCaffrey’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · Struggling Homeowners Remain in Mortgage Forbearance · 25 Jan 2021 podcast

So they did ask for forbearance from their lenders.

So there are a couple of different options when you do want to transition out of forbearance.

There's something called reinstatement where you kind of just pay a lump sum of all the months that you missed, which of course isn't feasible for a lot of people because now this is months worth of mortgage payments.

There's another option where you can tack the missed months onto the end of your loan.

So if you missed six months, you can just add six months to the length of your mortgage term.

And then there are other things like loan modifications where you can have those missed payments spread out over a number of months or a number of years.

So paying slightly more in the short term to make up for those missed months.

Right.

So because of the trend that, you know, the group of people in forbearance isn't really shrinking at the rate that it was before November, that means for those people in forbearance who have been in it since last spring, that's going to be a bigger group than maybe some people in the industry had expected.

Where they are facing that question, what happens after 12 months when the forbearance is up, but their income, their financial situation hasn't changed since they signed up last spring?

I've spoken to some people who have been in forbearance long term, so basically since last spring, and their incomes have not recovered.

They work in events or retail, and they're still not able to make these mortgage payments.

So they are hoping for an extension of forbearance.

But some folks in the industry who I've spoken to pointed out that maybe for people who will be struggling with their income long term,

They might have to look at some other options, which in this case might include like a sale of the house at some point, which I mean, there's one silver lining right now because home prices have been rising a lot.

So homeowners, if they did have to sell, would likely make a profit in many cases.

So right now, all you have to do to enter forbearance is call your lender if you have a federally backed mortgage and say you're having financial problems related to the pandemic and they should be able to place you in forbearance.

And I think a good share of homeowners use that latitude kind of as a safety net in the spring when things were really uncertain.

They didn't know when they would be going back to work.

They didn't know how long unemployment benefits would last.

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