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Q: What is a Disaster Forbearance Plan?
A: A Disaster 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 Disaster Forbearance Plan is not forgiveness of any portion of the debt.
Q: Am I eligible for a Disaster Forbearance Plan?
A: If you have been directly impacted, either financially or due to property damage from a recent natural disaster, you qualify for an initial Disaster Forbearance Plan of 1–6 months to help you recover during this challenging time. However, you will not automatically receive a Disaster Forbearance Plan, so it’s important that you contact us at 866-316-2432 to initiate the Disaster Forbearance Plan.
Q: Is a Disaster Forbearance Plan right for me?
A: A Disaster 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 Disaster 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 automatically added to the end of your loan. Once the Disaster Forbearance Plan expires, the full amount that you did not pay during the term of the Disaster Forbearance Plan will become due. At that time, we will work with you to determine what solutions may be available to you based on account eligibility and investor guidelines.
Q: What happens during the Disaster Forbearance Plan?
A: As a result of not making your regular monthly payments, your mortgage will become delinquent. However, we will not report the Disaster Forbearance Plan or the delinquency status of your loan to credit reporting agencies for the duration of the Disaster 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 Disaster Forbearance Plan?
A: At the end of the plan, the payments missed during the Disaster Forbearance Plan will become due, in addition to your regular monthly mortgage payment. However, we are here to help and will contact you before the end of your Disaster Forbearance Plan to discuss potential solutions to bring your account current. Of course, you can also contact us at 866-316-2432 any time before the end of the Disaster Forbearance Plan to review your solutions.
Q: What solutions will be available to me if I cannot pay the full amount of the missed payments at the end of the Disaster Forbearance Plan?
A: Solutions to bring your account current at the end of the Disaster 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 solutions described below, in which case you may be required to pay the full amount of missed payments at the end of the Disaster Forbearance Plan. However, some solutions that may be available, depending on account eligibility and investor guidelines, include:
- 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, typically from 3–6 months.
- Deferral. A deferral moves the principal and interest payment amounts missed during the Disaster Forbearance Plan to the end of the loan where they will be paid as a lump sum. This does not include tax and insurance payment amounts. Missed tax and insurance payments may cause a shortage in your escrow account, which may be paid as a lump sum or spread over a period of up to 60 months.
- 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 Disaster Forbearance Plan has ended may result in all or some of the following:
- A change to your interest rate;
- Extension of the term of the loan; and/or
- A higher loan balance, due to past due amounts and fees and costs being added to the unpaid principal balance.
Note: An adjustable interest rate will be converted to a fixed rate.
Q: How will a Disaster Forbearance Plan impact my credit?
A: If you were delinquent prior to the effective date of your Disaster Forbearance Plan, we will not report this delinquency (or the Disaster Forbearance Plan) to credit reporting agencies during the forbearance. The absence of reporting may be seen as a sign of an increased credit risk. Please talk to your financial advisor if you are concerned about how your forbearance may impact your credit. If you do not bring the account current at the end of the disaster forbearance or enter into a workout solution to bring the account current, you will be reported as delinquent.
Q: How will a Disaster Forbearance Plan affect my mortgage insurance payments?
A: It depends on the owner of your mortgage and what type of mortgage insurance you have on your loan. Entering into a Disaster 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 if you have any questions about the 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 solutions at the end of the Disaster Forbearance Plan but we cannot guarantee you will be approved. Entering into a Disaster Forbearance Plan may also impact your ability to receive incentive payments if you are currently receiving incentives under a HAMP modification, as well as your ability to have principal forgiven if you currently have a principal forgiveness modification.
Q: How will a Disaster Forbearance Plan affect my ability to refinance my loan?
A: Entering into a Disaster Forbearance Plan could impact your ability to refinance your loan. We encourage you to speak with your Mr. Cooper loan officer.
Q: Can disaster forbearance be offered for longer than 6 months?
A: Depending on the investor of your loan, additional months may be available. Please contact us at 866-316-2432 before the end of the Disaster Forbearance Plan to discuss your options.
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, you will need to start it again manually. (Note: if you use bill pay through your bank, be sure to pause your payments.)
Q: Why am I receiving documents/letters that indicate I’m delinquent?
A: As we noted above, while you are on a Disaster Forbearance Plan and are not making the full monthly payments, your mortgage becomes delinquent. We are required by law to send you certain notices regarding your past due status until you bring your account up to date. However, no late charges or negative credit reporting will occur during the Disaster Forbearance Plan period.
Q: Can I cancel the forbearance plan later if I decide I don’t want it anymore?
A: Yes, you can always cancel the Disaster Forbearance Plan before its scheduled end date. Just remember that when the Disaster Forbearance Plan ends, you will immediately be responsible to pay any payments you missed during the Disaster Forbearance Plan or you can contact us at 866-316-2432 to see if there is a workout solution available to you.
Q: What if my financial situation changes?
A: If your financial situation changes during the term of your Disaster Forbearance Plan, please contact us 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 us a call at 866-316-2432.