How to Begin an FHA Forbearance
FHA forbearance may be possible for some homeowners who are temporarily out of work. A special forbearance is available to those who have a good credit standing and good repayment history on their mortgage but have lost their job. The job loss makes it impossible for these homeowners to pay their monthly mortgage payment. If the home has a guarantee by the FHA, forbearance, or a temporary stop in payment requirements, may be possible.
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Instructions
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Determine whether the home is an FHA loan. The FHA will offer a special forbearance only to those who have an FHA-backed loan. To determine this, contact the lender directly to inquire about the loan's backing.
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Contact your lender to start the process. Request that the lender review the account activity to determine whether the account is eligible for FHA forbearance. Do this before the mortgage becomes more than 90 days past due. In some cases, the lender may approach the homeowner directly, but do not rely on this.
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Discuss the need for forbearance with the lender as soon as possible. Some lenders start the foreclosure process at three months' worth of late payments. Mortgages over 12 months late will not qualify for an FHA forbearance.
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Negotiate a solution with the lender directly. A special forbearance agreement must have a signature before the loan goes into foreclosure. Lenders are highly motivated to use these forbearance options, as the U.S. Department of Housing and Urban Development (HUD) offers cash incentives to lenders who do help borrowers.
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Show eligibility. The borrower must have good payment records and stable employment before the current delinquency. The borrower must be able to prove he lost of a job or otherwise suffered a dramatic drop income or show that living expenses have risen dramatically without a rise in income. The borrower must also live on the property.
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Begin the special forbearance. The lender must provide the borrower with at least four months, to catch up in payments. The borrower may not fall more than one year behind on payments to qualify. The lender will verify employment each month to determine when the homeowner can start catching up on payments.
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Tips & Warnings
An FHA forbearance may have additional penalties and interest applied to the loan. However, these are often less expensive than losing a home to foreclosure due to a lost job.
