Pub. 12 2021 Issue 1

www.wvbankers.org 26 West Virginia Banker Forbearance Expiry Expectations By Andrea F. Pringle, The Baker Group A wave of forbearance expirations expected this spring has investors anxiously awaiting clarity on what it will mean for the mortgage market. COVID-19 forbearance plans introduced by the CARES Act last year make it possible for any borrower with a mortgage backed by Fannie/Freddie/ Ginnie to stop paying their loan for a maximum of 12 months due to pandemic-related hardship. The ma- jority of loans in forbearance today entered forbear- ance in April 2020. With the deadlines on those loans fast approaching, what happens next is front of mind. There are several paths a loan can take when forbear- ance expires. These paths prioritize keeping borrow- ers in their homes and minimizing disruption to the mortgage market. For conventional borrowers, the exit paths follow the waterfall chart. (Figure 1) (Figure 1)