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did you know that the end of the forbearance period you will owe the bank every single penny that you did not pay them during the forbearance period and that the bank will most likely put a lien on your property that you will owe at the end or if you refinance or sell your property i will explain how to avoid that and what your options are we're coming to the end of the forbearance period in the year 2020 and a lot of people have been asking me what happens when the forbearance ends and i have to start paying my mortgage again i've done other videos that focus on every option that you have when the forbearance period ends in this video i'm going to focus on the most popular option which is deferral and what i think is a better option for you the karazhak says that any government-backed mortgage must offer any individual who's affected by kovid the option to put their property and their mortgage in a forbearance for as long as six months and then another six month extension we're coming to the end of that period so the banks are now sending letters stating we will offer you what's called a deferral a deferral is taking all the money that you have not paid to the bank during the forbearance period and essentially putting it at the end of the loan now what does that actually mean you might not understand this but a deferral is essentially asking the bank to put another lien on your property for every single penny you did not pay during the forbearance period if you owed two thousand dollars a month and you've been in forbearance for ten months and you're coming out of forbearance you will have a separate lien on your property for twenty thousand dollars a lot of people don't realize that that's gonna happen to them the actual effects of this really don't matter because you're not gonna notice it unless you refinance sell or reach the end of the mortgage but you have to understand that when somebody runs your credit or looks at the liens on your property there will be two liens instead of one on your property many people don't like that but that's your option when you ask for a deferral if the bank gives you another option which is to extend the mortgage beyond the normal period by the many months that you were in forbearance that might be in my opinion a better option in this way there is no separate lien that's placed on your property it's basically extending the loan out for 10 or 12 months however months you've been in for parents and just keep paying as if nothing happened what would happen in that situation i would imagine which a lot of people are looking at right now is the bank would basically issue a new mortgage extending the mortgage out for 10 more months or 12 months it is much more convenient for the bank to put a lien on your property in the deferral period than to extend the mortgage for as many months as you were in forbearance however in my opinion it's better for the homeowner to get the extension versus the deferral and the lien in the extension example you're not getting a lien what you're getting is basically a new mortgage that extends out for 10 more months or 12 months the period that you owed now a lot of banks aren't unable to do this because the rules of the investor do not allow the the mortgage to essentially be modified when you ask the bank to extend beyond 30 years a mortgage you're essentially asking for a loan modification now banks do low modifications all the time however in this particular circumstance this is not an actual loan modification because the payment would not change all you're asking the bank to do is to extend for 10 months or 12 months however many months you've been in the forbearance period your mortgage i would ask for this before you automatically accept a deferral if you have the option to extend the mortgage extend the mortgage and then you can avoid having a separate lien something other that you have to deal with when you sell the property now i've talked about this other third option in other videos and i want you to focus on this just for one minute if you are coming to the end of the forbearance period and you do not think that you can keep paying your old mortgage the best thing you should do is ask for a loan modification while you're in forbearance loan modifications usually require a homeowner to be late on their mortgage before a bank would consider a loan modification a loan modification is asking the bank to lower your payment to make it more affordable based on your income a lot of people have had a decrease in income because of covid when you when you let your loan go in default you're going to get late payments the cares act says that if you're in forbearance you don't get late payments on your credit you can still apply for loan modification and be current if you're in a forbearance the trick is to do it quickly don't wait to the end because if you wait to the end then the bank would end the forbearance and then you will be late for a couple months it takes about three to six months for a bank to approve a loan modification if you have three or four months left on your on your forbearance the time to apply for a modification is right now ask the bank for loan modification package fill it out submit it and you might actually get lucky and get a lower payment when the forbearance period ends this would not affect your credit and this will help you afford your home and move forward now the bank will do things when they do a real loan modification like extend the term lower the interest and possibly forbear a part of permanently for bear a part of what's owed to the back end of the mortgage all these things are very good for you if you're unable to make your mortgage payment but you have to plan it properly don't wait to the last minute to ask for a loan modification do it as soon as possible remember the karazhak says that credit is not affected when you request a forbearance you're technically not late even though you're not paying but you're not being reported to the credit bureaus this is a fantastic once-in-a-lifetime deal for you you're not paying your mortgage and you're not getting any consequences from it apply for a loan modification remember loan modifications are generally only available for people who are late on their mortgage which obviously affects your credit right now your credit's not being affected because you're in a forbearance use that time to apply for loan modification call the bank ask them for their package and submit it you might get a better deal remember a loan modification does not require good credit so if you're not paying your other things like your cars your credit cards and other things that you have in your life you can still apply for a loan modification it's a very good time to do this don't wait for the last minute make your application submit it and see if the bank offers you something good so you can move forward and keep your home my name is diego mendez i've done thousands of loan modifications for people i'm an attorney here in miami i've helped people in bankruptcy and other debt issues if you have any questions i will make my best attempt to answer every single question in the comments subscribe to my channel like my videos i will keep making these videos so that you can keep your home get out of the debt and get out of this covered mess in one piece thank you very much