You can skip mortgage payments for up to a year. Many fear what comes after that


In March, like millions of others, Thomas Taylor saw his income plummet.

The global pandemic left the 42-year-old furloughed from his two bartending jobs and staring down a $2,600 monthly mortgage payment on his Laguna Niguel condo.

Taylor reached out to his mortgage company for help but hit a wall. He wouldn’t have to pay for six months, he recalled being told over the phone, but would then have to pay back all missed payments — the equivalent of $15,600 — in one lump sum.

“I couldn’t come up with that in six months,” he said. “No way, not with no income right now.”

As the ranks of the unemployed have swelled, home owners have flooded their mortgage companies with requests for relief. Millions signed up for so-called mortgage forbearance programs that let borrowers delay payments or make partial payments while they wait for their financial situation to improve.

But there’s been mass confusion over how borrowers will pay back what they owe. And the fear of a looming lump-sum payment has caused some of them to skip the mortgage forbearance process altogether, sending them down risky alternative pathways.

Under the federal CARES Act stimulus law, borrowers with government-backed mortgages — through the Federal Housing Administration, the Department of Veterans Affairs, the U.S. Department of Agriculture, Fannie Mae or Freddie Mac — received the right to skip at least six months of payments if they have a financial hardship tied to the novel coronavirus.

That covers most borrowers. Those with private mortgages didn’t get that guarantee. But many are still finding help through their financial institutions.

The law still requires borrowers to pay back any missed payments but wasn’t specific on how they’d do so. Government agencies insist that borrowers with government-backed mortgages don’t have to pay everything back at once.

However, consumer advocates say some mortgage companies have incorrectly told borrowers they must pay back all missed payments in a lump sum or have made vague comments that lead stressed-out consumers to assume that’s the case.

A government inspector general this week criticized mortgage companies for providing “incomplete, inconsistent, dated, and unclear guidance” to borrowers on their websites.

Left to imagine the worst, borrowers told The Times they used credit card charges or withdrew money from savings to stay current on their mortgage payments. Taylor turned to family for help. Another person decided to pay late, risking a late fee and damage to her credit.

Other repayment options are offered by servicers, such as loan modifications. But some advocates de