CARES Act drives consumers to file forbearance
Mr. Cooper released its initial numbers on how it’s serving its customers during the COVID-19 pandemic, announcing it has placed more than 86,000 customers on forbearance plans. This is approximately 2.5% of the servicer’s total customers.
The new data comes just a week after President Donald Trump signed the CARES Act, which dictates that borrowers with federally backed mortgages can receive as many as 12 months of forbearance.
Forbearance
Forbearance, in the context of a mortgage process, is a special agreement between the lender and the borrower to delay a foreclosure. When mortgage borrowers are unable to meet their repayment terms, lenders may opt to foreclose. To avoid foreclosure, the lender and the borrower can make an agreement called "forbearance." According to this agreement, the lender delays its right to exercise foreclosure if the borrower can catch up to its payment schedule by a certain time. This period and the payment plan depend on the details of the agreement that is accepted by both parties.