Hi I'm Chris Boss with Boss Law, and we are a real estate and consumer law firm.
I wanted to talk about some of the credit risks that are associated with the CARES Act Mortgage Forbearance plan.
Now under the CARES Act, the CARES Act says if you have a Freddie Mac, Fannie Mae mortgage, there will not be any negative credit reporting. And this is true.
It is not going to show derogatory 30, 60, 90-day lates.
It is also not going to show positive payment.
It is going to be neutral and it's just going to show no payment and that you are in a forbearance plan.
Now, what's the problem with that?
The problem is if you want future lending. So if you want to refinance your house when you get back to gainful employment. Or if you want to buy another property, or purchase an investment home, and want to use financing - Future lenders are going to have an issue with the fact that you did not make 12 on-time payments.
So, if you have to get this program because you're unemployed and you just need relief from the monthly payments, absolutely apply for it.
If you could questionably make your payments or could make your payments, and have financial goals in the future for getting future financing, really consider whether or not you want that modification program because it could keep you from getting a future loan in the next year or so.