As the owner of a small marketing agency in central Florida, Edith Duran quickly found herself in a difficult spot as the coronavirus pandemic crippled the local businesses she counts as clients. She couldn’t draw her full salary in February, and by March, she was seeking relief on her mortgage.

She was allowed to pause her payments for three months starting in early April, but the company that handles her mortgage made a seemingly impossible request: Pay back the $4,450 in skipped payments on July 1.

“That is a lot of money to come up with all at once when we are struggling to get things aligned and get our lives back in order,” said Ms. Duran, who owes about $163,000 on her four-bedroom ranch in DeLeon Springs, Fla.

“The main problem right now is mass confusion,” said Diane Thompson, a lawyer at the National Consumer Law Center. “Borrowers are getting forbearances, but maybe for not as long as they would like, and it isn’t really clear what will happen on the back end when they need to start repaying their mortgages.”

More than 4.6 million borrowers, holding about 9 percent of all mortgages, were in forbearance as of Tuesday, up from just 150,000 in early March, according to Black Knight, a real estate data and mortgage software firm. Housing counselors who are accustomed to assisting low- and moderate-income borrowers are also now helping professionals who never expected to be in this position. Some states have also put foreclosure moratoriums and other protections in place.

Many borrowers have at least been able to get a forbearance for three months, according to housing counselors across the country. But what happens after that — and the type of longer-term relief offered to borrowers — will be determined by what kind of loan they have and who owns it.

Borrowers “are safe right now, but this is just the Band-Aid effect,” said Katherine Peoples, founder and executive director of HPP Cares, a nonprofit consumer credit and housing counseling agency. “This is the calm before the storm.”

Nearly 70 percent of homeowners with mortgages have loans somehow supported by the federal government. Fannie Mae and Freddie Mac, two government-sponsored entities, buy many loans from lenders and package them into investments that are akin to government bonds. Other borrowers who often put less money down have their loans insured by the Federal Housing Administration. Because of the government’s involvement in those loans, regulators have laid out options available to borrowers who must skip payments, and in almost all cases they can push back what they owe until the home is sold or refinanced or when the loan term is up.

The situation is often murkier for borrowers, like Carla Knight of Queens, whose loans are held by private investors.

Until recently, Ms. Knight, 50, worked as a paraprofessional caring for mentally challenged children while they rode on a school bus that now sits idle. Her paycheck was reduced before she was laid off completely on May 4.

After her pay cut, Ms. Knight called her mortgage servicer, Mr. Cooper, which said it would provide a three-month forbearance on her $198,000 loan with a lump-sum payment due when she restarted payments.

She called again after she was laid off, and the servicer extended her forbearance to six months — but she’d still owe a lump-sum payment. Come September, Ms. Knight said, she would owe roughly $13,500. If she isn’t allowed to push that back, her only alternative is to pursue a loan modification, which could, for example, allow her to extend the length of her mortgage. But that’s a more complicated process and often requires an application.

The uncertainty is unsettling. Ms. Knight, who lives with her 13-year-old twins and granddaughter in a four-bedroom home, said she had asked the company if the payments could be tacked on to the end of her mortgage. “But they keep telling me they have modifications,” she said.

Mr. Cooper declined to comment on her specific situation. A spokesman for the company said that its customers were offered an initial 90-day forbearance, but that it would grant relief for up to a year upon request. The company also said it was offering customers options to pay back the money over time, similar to alternatives offered to borrowers with federally backed loans. Ultimately, however, loan investors determine the options available to customers after the forbearance period — and in which order those options are presented to customers.

Borrowers with federally backed mortgages have more consistent terms. Those who can afford to restart paying should be presented with different ways to make up the skipped payments. They’ll be able to do it over time — say, six or nine months — while making their regular payments, or settle up when the loan term is up.

Even so, there has been confusion: A housing regulator had to release a statement in late April to make it clear that no lump-sum payment was required at the end of a borrower’s forbearance period. Some housing advocates say confusion has lingered, with homeowners whose mortgages are backed by the government still being told that they’d have to make lump-sum payments when they resumed their loans.

Wells Fargo is offering Allen Butler of Wheeling, Ill., who has a private loan, an option similar to those given to government-backed borrowers: He can push his payments to the back end of his mortgage.

Until recently, Mr. Butler worked as an M.R.I. sales rep with the same company for eight years. Though the process to recertify his unemployment benefits has been frustrating, he had little trouble receiving a forbearance.

“They were prepared for it,” said Mr. Butler, who lives in a four-bedroom townhouse with his wife and two sons, who are attending college. “We got a letter from Wells Fargo stating that we didn’t have to pay for three months or until July,” he said, “without any penalties or reporting us to the credit bureau.”

Wells Fargo said many of the loans it serviced were held in its own portfolio, which means it is not beholden to the terms of an agreement with private investors. The bank said it could suspend payments for up to a year and then, with its own loans, the borrower could tack the missing monthly payments to the end of the mortgage, without having to do anything else.

Whether a mortgage is backed by the government or another entity, the situation becomes more complicated for homeowners who still can’t afford their payments after the forbearance period. A more formal evaluation is necessary to modify their loan, which might, for example, extend the overall term to help them lower their payments. But if they have a private loan, a lot will depend on the terms with the private investor.

Ms. Duran, 44, is still waiting for the unemployment benefits she applied for the second week of April, but she is keeping a positive attitude. She’s also waiting to see if she’ll receive any assistance through federal relief programs for small-business owners.

In the meantime, she’s working with a financial counselor at GreenPath Financial Wellness, a nonprofit financial counselor in Farmington Hills, Mich., that has helped her trim her budget and inspired her to come up with new ways to increase her business revenue, like creating online marketing courses. The organization has also helped her consider strategies for dealing with her mortgage servicer, Select Portfolio Servicing.

The company did not respond to messages seeking comment. But according to a letter Ms. Duran shared with The New York Times, the servicer said it would “clearly communicate” with her about repayment options. One possibility, it said, was a deferral that would be due upon her loan’s maturity or when she paid off the mortgage.

That’s the kind of solution she’s hoping for, but when Ms. Duran called the servicer this week, she said, it told her that it would discuss further options only 30 days before the lump sum was due.

“This is my house,” she said. “It is really important that I don’t fall behind.”


If you are having trouble paying your mortgage or have already paused your monthly payments through a forbearance, here are some resources that may help:

  • A guide to mortgage relief options from the Consumer Financial Protection Bureau offers a tool to find out who owns your mortgage.

  • The Department of Housing and Urban Development offers a list of housing counselors on its website (or call 800-569-4287), and so does the Consumer Financial Protection Bureau. Counselors who are certified by HUD often offer their services free of charge because they receive funding from the government.

  • The National Housing Resource Center offers a directory of mortgage servicers. Servicers are generally supposed to contact you 30 days before your forbearance period ends to discuss your situation and your options. But if you don’t hear from them, or are concerned about what comes next, be proactive and call them.

  • Your state may be offering additional protections.

  • If you’re having a problem with your mortgage servicer, you can file a complaint with the Consumer Financial Protection Bureau. It will forward the complaint to the company and work to get a response, generally within 15 days.

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