Barrett Henry is a Broker Associate at REMAX Collective with 23+ years of Florida real estate experience. He helps homeowners across all 67 Florida counties navigate the options available when forbearance ends and the path forward is unclear. This article explains your rights and choices when your mortgage forbearance period ends.
You Do Not Have to Pay a Lump Sum When Forbearance Ends
One of the most persistent myths about mortgage forbearance is that all missed payments must be repaid in a single lump sum when the forbearance period ends. This is false. Federal regulations and investor guidelines for government-backed and conventional loans all require servicers to offer alternatives -- and lenders generally do not want a lump sum either, because most homeowners cannot pay it.
The CFPB, Fannie Mae, Freddie Mac, FHA, VA, and USDA have all issued guidelines requiring servicers to evaluate homeowners for all available loss mitigation options before proceeding with any foreclosure. If your servicer is demanding a lump sum with no alternatives, they may be violating federal rules.
Learn about your rights under Florida mortgage forbearance agreements.
Option 1: Loan Deferral (Move Payments to End of Loan)
A loan deferral is the most borrower-friendly option for most homeowners. It works like this: the servicer moves all missed payments to the end of your loan. You resume making your regular monthly payment as if the forbearance never happened. The deferred amount is due only when your loan matures, you pay it off, sell, or refinance.
Key features of deferral:
- No increase in your regular monthly payment
- No interest accrues on the deferred amount (for Fannie Mae/Freddie Mac programs)
- The deferred amount is a subordinate lien on your property
- Available for most conventional loans and some government programs
- Typically requires that you resume regular payments immediately
Fannie Mae's COVID-19 Payment Deferral and Freddie Mac's Payment Deferral programs were extended multiple times and remain available for eligible conventional borrowers in hardship situations beyond COVID. Ask your servicer if your loan qualifies.
Option 2: FHA Partial Claim
For FHA-insured loans, the primary tool for exiting forbearance without a lump sum is the FHA partial claim. HUD advances the missed payment amount to the servicer, creating a zero-interest subordinate lien on your property.
How the FHA partial claim works:
- HUD pays your servicer the overdue amount
- A second mortgage (subordinate lien) is recorded against your property in the amount of the partial claim
- No monthly payment is required on the partial claim
- The partial claim is due in full when you sell, refinance, or pay off your FHA loan
- HUD caps partial claims at 30% of your unpaid principal balance across all partial claims
If you have already used part of your 30% partial claim cap, a Combination Partial Claim and Loan Modification may be needed to address the remaining arrears. See our Florida loan modification guide for details on modification options.
Option 3: Repayment Plan
A repayment plan spreads your missed payments across a period of future monthly payments. Instead of one lump sum, you pay your regular monthly amount plus a portion of the arrears each month until the balance is cleared.
Example: 6 missed payments at $1,800 each = $10,800 in arrears. A 12-month repayment plan adds $900 per month for 12 months, bringing your total monthly payment to $2,700 during the repayment period.
Repayment plans work best when your income has fully recovered and you can handle a temporarily higher payment. They typically run 3 to 12 months depending on the arrears amount and servicer guidelines.
Option 4: VA and USDA Loss Mitigation Options
VA loans: Veterans Affairs provides several exit options for VA-guaranteed loans in forbearance: repayment plans, VA loan modifications, and the VA Vendee loan assumption program. VA servicers also have flexibility to offer special forbearance, reinstatement assistance, and compromise sales (VA short sales). The VA Loss Mitigation team can provide guidance at (877) 827-3702.
USDA loans: For USDA Section 502 guaranteed loans, servicers can offer payment moratoriums, repayment plans, loan modifications, and special forbearance. USDA Section 502 direct loans (serviced directly by USDA Rural Development) have additional options including reamortization and payment assistance. Contact your local USDA Rural Development office for direct loan assistance.
Option 5: Loan Modification
If none of the above options produces an affordable payment, a loan modification permanently restructures your loan terms. Modifications may:
- Extend the loan term to 40 years (available for FHA, VA, and some conventional programs)
- Reduce the interest rate
- Capitalize the arrears into the loan balance
- Defer a portion of principal as a non-interest-bearing balloon payment
Modifications typically require a 3-month trial plan to demonstrate you can make the new payment. Once you successfully complete the trial, the modification becomes permanent. Learn more about loan modification in Florida.
Your CFPB Rights When Forbearance Ends
CFPB Regulation X (12 CFR Part 1024) protects you throughout the forbearance exit process:
- Servicer must offer alternatives: Your servicer must evaluate you for all available loss mitigation options before proceeding with foreclosure (12 CFR 1024.41).
- Anti-dual tracking: If you submit a complete loss mitigation application more than 37 days before a scheduled foreclosure sale, the servicer cannot proceed with the sale while the application is pending (12 CFR 1024.41(g)).
- Request for Information (RFI): Under 12 CFR 1024.36, you can formally request information about your account, loss mitigation options, and the servicer's procedures. The servicer must respond within 5 business days (acknowledgment) and 30 business days (substantive response).
- Notice of Error (NOE): If your servicer provides false information -- such as telling you that a lump sum is required -- you can file a Notice of Error under 12 CFR 1024.35. The servicer must acknowledge receipt within 5 business days and correct the error within 30 to 45 business days. See our guide to Notices of Error and Requests for Information in Florida.
If your servicer still won't cooperate after you exhaust these channels, contact a HUD-approved housing counselor (free at 800-569-4287) or consult a foreclosure defense attorney.
What If You Cannot Afford Any Repayment Option?
If your income has not recovered enough to sustain your mortgage -- even with a modification or deferral -- you may need to consider exit options before foreclosure begins:
- Sell before foreclosure: If your home has equity, selling at market value before the foreclosure auction is the cleanest exit. You pay off the mortgage in full and may walk away with proceeds. See how to sell before the foreclosure sale.
- Short sale: If you owe more than your home is worth, a short sale with lender approval resolves the mortgage for less than the full balance, typically with a deficiency waiver. See how short sales work in Florida.
- Deed in lieu of foreclosure: Voluntarily transfer the property to your lender in exchange for release of the mortgage obligation. See deed in lieu of foreclosure in Florida.
Forbearance Ending vs. Foreclosure: Key Differences
Forbearance ending is not the same as foreclosure starting. After forbearance ends:
- Your servicer must first attempt to offer loss mitigation
- Florida's judicial foreclosure process requires filing a court complaint -- the servicer does not simply seize your home
- You have the right to respond to the foreclosure complaint and contest the case
- Once a foreclosure is filed, Florida's foreclosure timeline typically runs 10 to 18 months before an auction occurs
- You can sell, modify, or exit the property at any point before the auction closes
Related Resources for Florida Homeowners
- Forbearance agreements for Florida homeowners
- Loan modification in Florida: how it works
- Reinstatement: catching up on a delinquent mortgage
- How to request a reinstatement figure from your servicer
- RESPA Notice of Error and Request for Information rights
- Selling before the foreclosure auction
- Short sale in Florida: how it works
- Bankruptcy and foreclosure in Florida
- Florida foreclosure timeline
- Contact Barrett Henry for a free consultation
MARS Rule Disclosure: Barrett Henry is a licensed real estate professional, not an attorney. Nothing on this page constitutes legal advice. You are not required to use a third-party representative to contact your mortgage servicer.
Forbearance ending and unsure what to do next? Contact Barrett Henry today for a free, no-obligation consultation. We will help you understand all your options before foreclosure begins.
