Lender Deferment Agreements
- Identify the loan and the loan balance,
- Provide the exact period of deferment and when payments resume,
- The borrower should be clearly informed what happens to the deferred payments. Lenders are handling deferments differently. For example, if payments are added to the end of the loan and a larger last payment will be due, it should state that. If all the deferred payments will be due at the end of the deferment period, it should state that.
- When payments recommence at the end of the deferment period how will they be applied. If the resumed payments will be applied first to interest, it should state that.
- Clearly state if the length (term) of the loan is increasing. If the term of a mortgage loan is being extended, the lender may need to record a mortgage modification and get a title endorsement.
- A lender will want a waiver of claims and defenses by the borrower,
- There should be an explanation of when an escrow shortage caused by the deferment will be due.
For questions or more information, contact Sally Fox at email@example.com or 850.433.3869.