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Does coming out of forbearance impact the mortgage credit score?
Rosa Mumm, our product support manager, is asked quite frequently, “What’s going to happen to a borrower’s mortgage credit score when a loan comes out of forbearance?” According to the MBA, there are 2.7 million mortgages in forbearance as of January 31, 2021.
As we shared in our Forbearance 101 blog post last year, there is no impact to the score by going into forbearance. Although the removal of the forbearance comment does not have an impact, there are other factors associated with balance-to-original loan amount for installment accounts that may impact the score. Get the latest insights from Rosa in this video and see how you can use CreditXpert® What-If Simulator to review potential impact to your borrower’s score.
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According to the Mortgage Bankers Association, 8.46% of mortgage loans were actively in forbearance at the end of May. Before the COVID-19 crisis impacted the economy, the forbearance rate was much lower at 0.25%.