Mortgage Payment Deferment or Forbearance during Covid-19 Coronavirus

Updated: Sep 25

Many are concerned about being able to make their mortgage payments during any sort of shut down. It's important to fully understand what options you have and what the consequences of these choices may be.

Forbearance/Deferment - Generally, forbearance and deferment simply mean that a creditor will not enforce payment on a debt and may "defer" or delay payment on a debt. It does NOT mean that those payments are forgiven OR that they are pushed to the end of the loan. Many people that defer their mortgage payments with their mortgage companies do not understand that a lump sum of ALL of the missed mortgage payments will come due at the end of the forbearance or deferment period, PLUS interest! Let's look at an example:

  • Mary's employer has temporarily shut down and she is currently receiving unemployment. Mary is concerned about being able to make her mortgage payments and calls her mortgage company to enter into forbearance or deferment of her ongoing payments for three months. Her mortgage company tells her that they will defer her payments of $1000 per month for May, June and July. In August, her mortgage company tells her that her payments are now due as well as her deferred payments, which means that she now owes her August payment of $1000 PLUS $3000 for May, June and July payments that she did not pay, for a total of $4000!

As you can see by this example, a forbearance or deferment of mortgage payments does NOT forgive these payments or add them automatically to the end of a mortgage loan. Only a formal loan modification can do this. Additionally, if you are in a current Chapter 13 bankruptcy case, note that keeping your mortgage payments current are a requirement of your Chapter 13 plan. If you enter into forbearance or deferment on your mortgage payments and fall behind, you risk violating your Chapter 13 Plan.

If you've found yourself in trouble with your mortgage payments, foreclosure or other debt issues due to the pandemic, call me today to see if I can help you. 269-381-4471

Attorney Allison Greenlee Korr handles cases in Kalamazoo, Battle Creek and all surrounding counties, call today for a consultation. 269-381-4471


121 W Cedar Street

Kalamazoo, MI 49007

All information provided on this site should not be construed as legal advice.   Always meet with an attorney to find out your legal options.

Copyright 2020 Stancati, Hencken & Greenlee P.C.