Quote:
Originally Posted by tobias030  hi does anyone know what principal foreberance means?
thanks
tobias030 |
They take principal off the loan amount which makes your payment lower, but it is put on at the end as a balloon payment that is paid when a) the loan matures; b) you sell the property; or c) you refinance. Here is the actual wording from the Making Homes Affordable aka HASP govt plan:
If the option to forebear principal is selected, the servicer shall forbear on collecting the deferred portion of the Capitalized Balance until the earliest of (i) the maturity of the modified loan, (ii) a sale of the property, or (iii) a pay-off or refinancing of the loan