When unexpected life events occur, such as the loss of a job, a divorce, or a harsh weather event that damages a home or business, Michigan property owners find it impossible to make their mortgage payments. This does not mean foreclosure is a given. Some lenders take into account impactful circumstances and grant the property owner a special forbearance, which puts off mortgage payments for a later date.
There is no specific list of circumstances that lenders consider when granting forbearance, but as FindLaw explains, a lender will give consideration to a number of emerging issues. A property owner may have become unemployed. The owner may have suffered injury or became ill. A natural disaster may have impacted the life of the owner in a negative fashion. Some mortgage owners have co-borrowers that pass away.
The important factor in seeking forbearance is that your circumstances must be temporary. Forbearance involves postponing missed payments to a later time, meaning the lender has an expectation that those payments will eventually be made. So the circumstances that are interrupting your ability to pay your mortgage must have an end point. Your illness, for instance, should not be permanent or disabling. You should have a reasonable expectation of recovering your health and resuming your job.
Some homeowners have loans that are insured by the Federal Housing Administration (FHA). These property owners can seek forbearance under the FHA special forbearance program by showing that they have lost income due to unemployment. If the homeowner does not have another source of income, this forbearance program grants a homeowner a period of twelve months to allow the property owner time to seek a new job.
Even if you do not qualify for special forbearance, there are other alternatives to foreclosure that can be explored. Keep in mind that this article is presented for educational benefit. It does not offer legal advice for your situation.