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Service Members On Active Duty Turn To
Military Forbearance To Help Ease The
Financial Pain
Military Forbearance To Help Ease The
Financial Pain
The housing crisis has touched almost every America. Many of us have personally suffered
foreclosure, or a short sale on our homes. We might even know a friend, a neighbor or a
co-worker who suffered the same fate. Service members in the military are no different. Many
are having financial difficulties due to injuries. Their families are also hurting because of the
death of a military spouse. Military forbearance helps ease the financial pain. This is a program
from Fannie Mae.
Military forbearance is an agreement between a homeowner and a lender that allows the
homeowner to stop making mortgage payments or to reduce the amount of the payment. The
term is generally for six months. This buys you some time to get back on your feet and get your
financial house in order, and also to avoid foreclosure.
Credit reports.
Military forbearance will not damage your credit. All credit reporting is suspended during the
time of the forbearance period.
When to consider military forbearance.
If you are several months behind with your mortgage payments.
If you are unable to refinance or if you believe refinancing is too risky.
If the financial hardship was due to the death or injury of a spouse while on active duty.
What happens after the forbearance period.
After the forbearance period has ended you will have to repay the money. For example, if you
were allowed to miss 6 payments at $2,000, then you have to make arrangements to repay the
$2,000. It could be a one time lump sum payment for the full amount. You could spread out the
amount by adding $200 to your regular payment. You will have to do this for 10 months. The
term of your mortgage can also be adjusted. In this scenario the $2,000 will be added to the
mortgage balance and you will extend the term by about 10 months.
Critics of the military forbearance program are quick to point out that this is similar to putting a
bandaid on a shark bite. They claim that many of the borrowers will eventually default on their
loans. They also add that we are just giving them false hope.
The program isn't perfect. No program is. But if it helps some families, let us be thankful. Maybe,
some families need more than six months to get back on their feet. Some you might give them
six years and they will still be in financial trouble.
What I would like to see added to the program would be some counseling and financial
education.
foreclosure, or a short sale on our homes. We might even know a friend, a neighbor or a
co-worker who suffered the same fate. Service members in the military are no different. Many
are having financial difficulties due to injuries. Their families are also hurting because of the
death of a military spouse. Military forbearance helps ease the financial pain. This is a program
from Fannie Mae.
Military forbearance is an agreement between a homeowner and a lender that allows the
homeowner to stop making mortgage payments or to reduce the amount of the payment. The
term is generally for six months. This buys you some time to get back on your feet and get your
financial house in order, and also to avoid foreclosure.
Credit reports.
Military forbearance will not damage your credit. All credit reporting is suspended during the
time of the forbearance period.
When to consider military forbearance.
If you are several months behind with your mortgage payments.
If you are unable to refinance or if you believe refinancing is too risky.
If the financial hardship was due to the death or injury of a spouse while on active duty.
What happens after the forbearance period.
After the forbearance period has ended you will have to repay the money. For example, if you
were allowed to miss 6 payments at $2,000, then you have to make arrangements to repay the
$2,000. It could be a one time lump sum payment for the full amount. You could spread out the
amount by adding $200 to your regular payment. You will have to do this for 10 months. The
term of your mortgage can also be adjusted. In this scenario the $2,000 will be added to the
mortgage balance and you will extend the term by about 10 months.
Critics of the military forbearance program are quick to point out that this is similar to putting a
bandaid on a shark bite. They claim that many of the borrowers will eventually default on their
loans. They also add that we are just giving them false hope.
The program isn't perfect. No program is. But if it helps some families, let us be thankful. Maybe,
some families need more than six months to get back on their feet. Some you might give them
six years and they will still be in financial trouble.
What I would like to see added to the program would be some counseling and financial
education.
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