Help me understand the mortgage forbearance agreement

It won’t. If you’re underemployed with no income how will you come up with the money? Should have deferred the payment and added to the back end of loan.

You're not missing anything

We'll, it gives them more time to come up with the money if for some reason they don't have it for the first mortgage payment when the forbearance is available, etc. Not great, but I guess it's something.

Run away. Don’t do it.

Turns out to be a loan modification. And depending on your lender, it’s a very misleading and tedious process.

ConsumerFinance.gov

quote:

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Questions to ask What options are available to help you temporarily reduce or suspend my payments? Are there forbearance, loan modification, or other options? Can you waive late fees? Get it in writing

Once you’re able to secure forbearance or another mortgage relief option, ask your servicer to provide written documentation that confirms the details of your agreement and that you’re clear on what the terms are. With some forbearance programs, you may owe all of your missed payments at one time, or additional payments at the end of the mortgage might be required, so make sure you’re familiar with the final terms.

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The usual, not seen this specific one though, is to "defer" the payments to the end of the note.

So your example of 6/20-9/20 would hold. Without late payment fees since the lender is agreeing the due date is moving 3 months.

What you do get though is 3 months interest accrual. Depending on how early into your term is how big a difference that makes (higher principal = higher accrual vs late in your term lower principal = lower accrual) in actual cost.

Then there's the whole decision making on whether your job and income (separate things in this new paradigm) will return in the 3 months or so, what inflationary impact artificially inflating the amount of money supply by several Trillions will do to cost of living, etc..

If very very early in the term of the mortgage and questionable income return it could be better to walk away. Or it could be in one's best interests to remain. Purely an individual decision.

As a previous mortgage lender I can understand both sides of the equation. Can't fault the individual for making the best decision for themselves. Can't fault the lender for trying to protect themselves either. Situation like the current one could easily be a lose/lose case with the negotiations around who loses more, or equally, lender vs debtor.

Good luck!

This guy has some thoughts on it. (NSFW Language)