[Moe Bedard]

If the lender forbears (defers) principal, the amount of the deferred principal will be owed when the loan is paid off or refinanced, or the house is sold. There will be a balloon payment in the amount of the deferred principal but it will not accrue interest. If the lender extends the amortization period but not the term, it will increase the size of the balloon. The amount of the increase will depend upon when the loan is paid off. Clear disclosure to consumers about the balloon payment is important.

The investors are not going to be forgiving that amount.............it will come due when the loan is extinguished through sale, refi, or paid off.