What to Know About Coming Out of Disaster Forbearance

Disaster forbearance is a critical — but temporary — lifeline for homeowners experiencing financial hardships caused by a natural disaster. Although a temporary pause or reduction in your monthly payment can help you stay in your home, it is important to be prepared when forbearance ends and your normal payments resume.

A forbearance temporarily reduces or suspends your mortgage payments to help you get back on your feet, if you are facing a short-term hardship. During a forbearance period, your mortgage company may not assess late fees and will not report forbearance or delinquencies caused by the disaster to credit bureaus.

When disaster forbearance ends, your options may vary depending on your loan servicer. For instance, if your loan is serviced by Freddie Mac, the available options will depend on whether you’re still affected by the disaster that triggered your forbearance period.

Your Options for Repayment

• Lump sum payment. If you are able, you can repay the missed payments to your servicer in one lump sum payment that covers the total amount owed.
• Repayment plan. If you are able to resume your monthly payments in addition to making up missed payments, you may be able to work out a repayment plan with your servicer. This could result in a higher monthly payment until you have fully repaid your missed payments.
• Payment deferral. If you are able to resume making your regular monthly payment, but unable to take on the increased monthly payment of a repayment plan, a payment deferral will bring you immediately current on your mortgage. Any missed payments from your forbearance period will be set aside and will be due when the loan pays off or at the end of the mortgage term, without interest or penalties.
• Mortgage modification. If you are able to resume making a monthly mortgage payment, but not able to cover an increased amount for a repayment plan or the same amount you were paying prior to the disaster, you may be eligible for a mortgage modification. This can lower your monthly payment by permanently changing one or more terms of your mortgage.

You should remain in contact with your loan servicer throughout the disaster forbearance period to discuss your options before the period ends. In any scenario, your servicer will work with you to determine your eligibility for different repayment options and help you find the best path forward.

Learn more about disaster relief and mortgage assistance options available to homeowners facing hardship.

Last reviewed: July 16, 2024