Warning – potential skipped payment trap.

As you know, I have recommended that you contact your lenders and see if you can skip some payments during this shelter at home period.    I still believe this, but I want to add a clarification.   The terms of the skipped payments agreement are CRITICAL.   What you want is a deferment of payments, meaning the missed payments are put at the end of the loan.    I am hearing that lenders are offering to skip payments but as a forbearance, and borrowers are not informed, or do not understand what the lender is offering.   In a forbearance, depending on how the lender defines it, the missed payments are often due in full at the end of the forbearance period.   So, if you get an agreement to skip 3 payments, then in 90 days those payments could be due in full as a lump sum.  

Please discuss the terms carefully and understand what has been agreed to.  A forbearance may be better than nothing, but it is certainly not what is really needed.   Should you fall behind on your mortgage, once things lift there may be options to save your home, but it is always best to avoid the problem if you can.  Stay safe and let me know if you have questions.