Hello, everyone and welcome back to a new video sean's, a name and mortgages are the game today. We're talking about the free mortgage payment that all these mortgage companies and influencers and news stations are all advertising about. Aka mortgage forbearance. All of these people talking about mortgage forbearance are not in the trenches every single day like i am i'm a mortgage broker licensed in arizona in texas, so i am legit the liaison between the servicer or the company that is servicing mortgages and the end consumer.

Who is paying on these mortgages again? My job is literally to be the liaison between the two and there's all sorts of great perks for working with someone like me i'll. Let you kind of learn more about that on lending.shawnmaoku.com, but today i want to focus on mortgage forbearance and if you should do it or if you shouldn't, do it ultimately, what is the truth? So, let's find out okay so before we actually dive into why you should do mortgage forbearance or why you shouldn't do it. We need to actually understand what mortgage forbearance actually is. Then we can make an educated decision on whether it's right or not for us.

So what is mortgage forbearance? Mortgage forbearance is a temporary postponement of mortgage payments granted by the lender or creditor in lieu of forcing a property into foreclosure. The terms of a forbearance agreement are negotiated between the borrower and the lender. Big keyword here is temporary postponement. Forbearance does not mean that your mortgage payment, or even your entire mortgage, is completely forgiven and that you'll never have to pay it.

No, actually, the best way to understand it is essentially like procrastination. It's the adult version of procrastination. The longer you wait to do it. The harder and harder it's gon na be and again mortgage forbearance can come in all different shapes and sizes, and it's ultimately up to you and your mortgage servicer to kind of dial in and figure out, what's actually offered and what you can do.

But i want to give you a typical and actually one of the most popular scenarios when it comes to mortgage forbearance, because again, this is what probably 90 of lenders are gon na be offering to do with you, and a lot of people are not prepared for It so this is what a typical mortgage forbearance situation looks like so daddyo here has a mortgage, and it's currently fifteen hundred dollars per month. Well, dad gets laid off calls the loan servicer and he asks for a forbearance with a quick and simple phone call. Dad gets six months free of mortgage payments. Okay, now, let's fast forward seven months to when dad is back to work and that mortgage forbearance is no longer there well, dad hasn't really been able to save up any money over those last six to seven months because he hasn't been working.

He's had to dive into his savings, which is totally understandable. So this is what ends up happening when the forbearance period ends. Okay, that's nine thousand dollars plus fifteen hundred dollars, which is now due, brings your total to uh ten thousand five hundred dollars. Sir wait.

Why? Well, sir, that's six months of mortgage forbearance plus, what's due in your current month? Well, i can't do that. So we're gon na have to work something out. I've got just the solution for you we'll spread that nine thousand dollars out over the course of the next 12 months. Okay, cool yeah, i'm down for that.

So what does that? Look like that'll be two thousand two hundred and fifty dollars a month for the next year. Well, what does that? I can't afford that. Sorry, oh and the worst part about this entire situation is that you can't even refinance your mortgage now, because your loan went into forbearance and most of the time you have to wait 12 months after your loan has gone into forbearance or if you can bring it Current it all kind of depends on your specific situation, but you're kind of in a little bit of a rut. Now that you went into mortgage forbearance.

So all this kind of sucks right and you're, probably sitting there going well sean so clearly, you're saying mortgage forbearance is a no go and do not do that. Not quite i'm not quite saying that, because there always is a good reason for one thing or another, depending on your situation, if you truly cannot make your mortgage payment, like you, just got laid off, you have no money coming in and you literally cannot survive. If you make your mortgage payment like you just you can't do it right, then. 100, yes, take advantage of mortgage forbearance, there's nothing worse than foreclosing on your home, because you can't make the payment at the end of the day.

You do not want to foreclose at all costs, so if that means you have to go into mortgage forbearance to buy you some more time, then 100. Do it again for closing on a home, absolutely sucks. It pretty much delays your chances at being able to buy another home for quite some time, depending on the loan program you want to go into, but that's the thing is you don't want to foreclose because it's going to kill your credit, it's going to delay you From buying another home and you're, ultimately going to get kicked out of your home anyway, so it's like the triple whammy of death that you do not want to do so to avoid foreclosing at all costs, definitely go into mortgage forbearance. Remember, mortgage forbearance is the adult version of procrastination.

If you've got a big test coming up, would you rather walk into that test without studying and vomit and fail the class, and then you have to retake the entire class, or would you rather say hey look teacher? I didn't study. Can i get an extra week to study and they'll, say yeah sure, we'll give you an extra week to study your test is going to be a little bit longer, but yeah we'll give you an extra an extra week if that'll help you get a better grade, Then yeah you're, going to 100 take that and you're going to hopefully be able to pass that test and ultimately pass that class because you don't want to get yourself into a bigger world of hurt. So you need to think of it like that. Mortgage forbearance buys you time that is it.

It is not a freebie, so i only recommend going into mortgage forbearance if you 100 need it. If you do not 100 need it, then do not do it. I say this all the time, but nothing in life is free, so a lot of people see the mortgage forbearance and they think it's a freebie. Nothing is free, that's just not the way our economy works by not paying your mortgage you're, not just hurting your mortgage.

Servicer, by putting less money in their pockets, that's not what it's about! When you don't pay! Your mortgage you're hurting your next door. Neighbor, the guy who's invested his entire life savings into his 401k, so he can retire and his 401k is heavily made up of mortgage-backed securities if you're not paying your mortgage. Those mortgage-backed securities are super low and not worth that. Much and now your neighbor can't retire because their entire life savings has now dwindled to basically nothing aka to crash in 2008., and i don't want to get too much into the weeds with this topic but think of mortgage-backed securities or your mortgage like a stock.

Think of it like tesla, for example, right, let's say you go man, tesla they're, making lots of money. I want to drop a bunch of money in there because i think they're going to continue to be profitable. So you buy a bunch of you. You spend a hundred grand on tesla and you buy a bunch of stocks and you think yeah tesla's going to continue to make money.

That's what i'm going to retire off of them and put 100 grand in there by time. I retire. It's going to turn into a lot more money, i'll, be able to pull that out and live comfortably. Well then, the next day elon musk comes out and says: hey, you know what we're going to do this tesla forbearance thing.

If you want a tesla, come get it, it's free, we're not charging anyone for tesla's anymore. We don't need to make money. Well now, your hundred thousand dollars that was in tesla is now worth a dollar because the company is no longer profitable and when it's no longer profitable, you're not going to be making money and in fact, you're going to be losing money. So that's kind of the problem with mortgage forbearance that a lot of people don't understand the value of the mortgage-backed securities market or, like the stock price of it, relies heavily on the value of all the assets that those mortgages are holding on the home.

So if you're not paying your mortgage again, it is hurting the entire economy and a lot of people will look at mortgage forbearance and think, if i don't pay my mortgage, the only person i'm impacting is my servicer. No, the person you're impacting is actually yourself. So that's like a quick and dirty way of how the mortgage-backed securities market works. I'm just trying to say that you're not just hurting a mortgage, servicer you're, hurting yourself and your neighbors because of the massive impact it has on our economy.

That's why any type of relief program that is ever put out to the masses always has a silver lining that kind of takes from a different area. So there's never anything. That's free in life and understanding the full process and the full backstory of everything should really put you in a position to make an accurate decision. But that, ladies and gentlemen, is the truth behind mortgage forbearance, a lot of people don't understand it or a lot of people will send it out in mainstream media and not really give people the full idea of what it is.

So hopefully you got a full understanding of it, and now you can make a decision if it's right for you or not again i'll, say that mortgage forbearance can be super helpful and beneficial, especially during challenging times, but more often than not. It is not worth it for you and you're going to be put in a whole world of hurt if you end up doing it. So what i always recommend people do is just lower your liabilities elsewhere. If that means selling a car and going for a lower monthly payment or refinancing your car to bring your monthly overhead down or just getting rid of a lot of stuff that you don't need and always tell people you know, a mortgage payment can be very expensive And it's usually your most expensive expense in your daily life.

But if you were to grab a side, hustle you'd be able to kind of supplement some of that income, especially if you get laid off or hours cut or things like that. So get a side. Hustle going make a little bit extra money. Actually, speaking of that, i have a couple videos on some great side: hustles, you can do to make some really good money, so i will leave those videos linked down below for you to learn more about that.

Well that sums this video up again think big picture and think what can happen later down the line. If you take a mortgage forbearance program on right now, but again enough of me rambling. Hopefully you enjoyed the video. If you did, i would appreciate if you can hit that like button drop me a comment down below of what you think about mortgage forbearance and maybe, if there's some other great solutions to something that could help people out.

I always love hearing you guys feedback. So drop me a comment down below and then also subscribe. If you're new around here, i'm always releasing some great content that can help you out financially um. So i'd love to kind of stick around with you, but otherwise i hope you enjoyed the video and until next time i'll see you later you.