For those "allowed" to skip mortgage payments, I assume interest still compounds

Yes in every instance I have seen, payments are simply deferred but interest accrues. The benefits to the borrower are strictly cash flow

Three month forbearance here. I can pay all, part, or none of my mortgage payment during that time. There will be no effect on my credit score. At the end of the three months, I will owe the amount in its entirety. At that point I can pay the full amount or call and set up a repayment plan.

You need to clarify if it is a forbearance or a deference. If it’s a forbearance, you could get hit with a lump sum payment due at the end

I'm guessing they would perhaps go to interest only and the borrower would still want to pay the escrow portion if possible? I would assume A. the borrower would have to contact the lending institution beforehand and B. that such forbearance would have no effect on Creditworthiness?

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For those "allowed" to skip mortgage payments

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There's no "skip". I called my lender a couple of weeks ago, their plan just pushed back your payments to x date as if it were a balloon payment. So if a note is $1k per month and it was pushed back 2 months then on that 3rd month the amount due would be $3k.

Needless to say, I passed on that. Other lenders may have it set up differently though.

quote:

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There's no "skip". I called my lender a couple of weeks ago, their plan just pushed back your payments to x date as if it were a balloon payment. So if a note is $1k per month and it was pushed back 2 months then on that 3rd month the amount due would be $3k.

Needless to say, I passed on that. Other lenders may have it set up differently though.

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That is my exact scenario. I am not doing any forbearance.

I foresee some people are really going to be screwed in a few months when they get hit with a balloon payment.

You’ll have to pay a lump sum. Your missed payments all at once plus late fees.

The only “relief” is that they won’t foreclose after being 30 days late.

With the number of people in this position, no one is getting foreclosed on for 30 days late. I'm guessing you'd have to miss the rest of the year to get foreclosed on by major lenders. The crash of 2007-2010 is still too fresh in people's minds.