New Mortgage after Covid-19 Forbearance

[Anonymous]

My FHA mortgage was in forbearance at the beginning of the pandemic. I'm back on track and making scheduled payments again. We are considering moving but I'm concerned we may not be able to get a new mortgage with the forbearance listed on my credit. My mortgage account was current when the forbearance started so there is not anything negative listed but it does show it was under forbearance. I now have a HUD partial claim I will have to pay back when I sell or on the maturity date. 

Has anyone come across this or have any insight on a situation like this? 

[Anonymous]

Hi, 

We took advantage of the COVID-19 mortgage forbearance when the lock down started back in March 2020. We ended up missing 3 months of mortgage payments. In October our lender offered us a modification as long as we could make 3 months of trial payments on 11/1/2020, 12/1/2020, and 1/1/2021. I made all those payments in time. Anyways long story short, we ended up wanting to sell our house around Christmas and also buy at the same time. We got preapproved for a mortgage with conditions that we sold our  current house. Our house got an offer in 3 days for $25,000 over asking!! We found a house to put an offer in a week later before New Year's Eve. Fast forward to today we just got the clear to close!!! My credit report showed that we were up to date with our current mortgage but it showed "no data" for months May-November. The CARES Act states that lenders do not need to report "forebearance" on credit report, my credit report didn't say forbearance but my lender still had to verify why the mortgage didn't have any data on the months that I didn't pay. Needless to say we still got the clear to close today! 

Find a good lender and loan officer. Best to disclose everything to them either way ...Good luck to you!!

[Anonymous]

@Anonymous  Thank you. This answer helped so much!

congrats on the new house!

[Anonymous]

Actually in the same.boat as we speak. Could you suggest a good lender or one you used?

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@Anonymous wrote:

Hi, 

We took advantage of the COVID-19 mortgage forbearance when the lock down started back in March 2020. We ended up missing 3 months of mortgage payments. In October our lender offered us a modification as long as we could make 3 months of trial payments on 11/1/2020, 12/1/2020, and 1/1/2021. I made all those payments in time. Anyways long story short, we ended up wanting to sell our house around Christmas and also buy at the same time. We got preapproved for a mortgage with conditions that we sold our  current house. Our house got an offer in 3 days for $25,000 over asking!! We found a house to put an offer in a week later before New Year's Eve. Fast forward to today we just got the clear to close!!! My credit report showed that we were up to date with our current mortgage but it showed "no data" for months May-November. The CARES Act states that lenders do not need to report "forebearance" on credit report, my credit report didn't say forbearance but my lender still had to verify why the mortgage didn't have any data on the months that I didn't pay. Needless to say we still got the clear to close today! 

Find a good lender and loan officer. Best to disclose everything to them either way ...Good luck to you!!

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[recoverychick]

Hi! 

Good to know things are going well for you.  I hope things will get better for everyone soon. 

Does your HUD Covid Stand Alone Partial Claim appear as a junior lien and a second mortgage account on your credit report?  I'm wondering how it is reported.  I've been looking for information everywhere, but can't find any  Thanks for your help!

[Nguyenfam]

@Anonymous - Thank you so much for sharing the details below! While there is a ton of information regarding the "guidance" on this topic, it's good to know there are success stories and, more importantly, details about how it's possible. Would you mind elaborating on the timeline? It's not exactly like my situation, however, I'm looking to see if things could end up similar (with my only difference being a Refi instead of New Purchase).

For example, you mentioned starting in March 2020 and missed 3 months during the forbearance under CARES Act. Which months? Just trying to break down the timeline and curious if the duration makes a difference on case-by-case basis.

Thank you so much and congratulations on clearing this mortgage minefield!

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@Anonymous wrote:

Hi, 

We took advantage of the COVID-19 mortgage forbearance when the lock down started back in March 2020. We ended up missing 3 months of mortgage payments. In October our lender offered us a modification as long as we could make 3 months of trial payments on 11/1/2020, 12/1/2020, and 1/1/2021. I made all those payments in time. Anyways long story short, we ended up wanting to sell our house around Christmas and also buy at the same time. We got preapproved for a mortgage with conditions that we sold our  current house. Our house got an offer in 3 days for $25,000 over asking!! We found a house to put an offer in a week later before New Year's Eve. Fast forward to today we just got the clear to close!!! My credit report showed that we were up to date with our current mortgage but it showed "no data" for months May-November. The CARES Act states that lenders do not need to report "forebearance" on credit report, my credit report didn't say forbearance but my lender still had to verify why the mortgage didn't have any data on the months that I didn't pay. Needless to say we still got the clear to close today! 

Find a good lender and loan officer. Best to disclose everything to them either way ...Good luck to you!!

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[Anonymous]

I'd like to know what modifications can be made and the criteria? We have a 4 unit property plus reg mortgage in forbearance and we still are prohibited from evicting no pays. Unfortunately we lost all the principal we had paid into our mortgages, and now the "principal amount" is now more than $100K than what is was before COVID (so now they would be jumbo loans but were not before)!

So now if they were to refinance it, the loan is even larger than it was before!

Our credit score is excellent fortunately but not sure if this even helps up.

I'm worried about the unpredictably of all of this and more people could end up not paying and us having no recourse! 

I would love it if they could get us the current market refinance rate and longer terms, and put the loan principal back to where it was just before COVID so we don't have to finance even larger loans! 
1) Does anyone know what options are available mortgage companies offer for Sallie Mae backed loans?

2) How is this determined or qualified for?

3) How does income and credit score affect what they can offer, or willing to?

- It's now almost perfect 850 and has taken me years to accomplish this, but this might mess that up totally. I hope in this case a great score doesn't hurt us as far as any assistance the bank could make to the modification or refinance. 

4) Is it better to have a higher salary for more leverage to work with or does it end up hurting you (like they would be less willing to help you even though in reality the higher wages the less risk to them?)?

-  I ask this because my husband's last paycheck was unusually large because he moved jobs and he was paid out all his unused vacation time after many years of service. He is working a new position in same line of work at a little higher wage as a fire chief. 
- Even though it is risky to get out of forbearance due to tenant risk, it would be nice to know if we could afford to take that risk, and how to get hopefully a best case scenario. 

[rom828]

I'm searching for the same info myself  and  not really finding anything.  I'd like to know if it just shows as 2nd mortgage on report and if it carries any negative impact beyond being a new acct....and a 2nd.  I understand the HUD loan is also balloon payment, so have to pay in entirety to pay off early.   It's been a few months since you posed your question.......any new info?!

[Jesuschild2712]

Did you end up having to pay the partial claim? I refinanced from FHA to conventional and I didn't pay the partial claim. No one has reached out or said anything.

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@Anonymous wrote:

Hi, 

We took advantage of the COVID-19 mortgage forbearance when the lock down started back in March 2020. We ended up missing 3 months of mortgage payments. In October our lender offered us a modification as long as we could make 3 months of trial payments on 11/1/2020, 12/1/2020, and 1/1/2021. I made all those payments in time. Anyways long story short, we ended up wanting to sell our house around Christmas and also buy at the same time. We got preapproved for a mortgage with conditions that we sold our  current house. Our house got an offer in 3 days for $25,000 over asking!! We found a house to put an offer in a week later before New Year's Eve. Fast forward to today we just got the clear to close!!! My credit report showed that we were up to date with our current mortgage but it showed "no data" for months May-November. The CARES Act states that lenders do not need to report "forebearance" on credit report, my credit report didn't say forbearance but my lender still had to verify why the mortgage didn't have any data on the months that I didn't pay. Needless to say we still got the clear to close today! 

Find a good lender and loan officer. Best to disclose everything to them either way ...Good luck to you!!

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I haven't heard anything and I have no idea how it works.