I’ve spent the last three weeks on the phone with sellers who took CARES Act forbearance back in April and just got a 90-day-out call from their servicer asking what they want to do.

The conversation usually goes the same way. The homeowner thought forbearance meant the missed payments were forgiven. They weren’t. The servicer is now asking how the homeowner plans to repay, and the options the servicer is laying out range from manageable to brutal depending on the lender and the loan type. A few of those homeowners are going to be fine. A few are going to be in foreclosure proceedings by spring 2021 if they don’t act now.

This post is for the second group. If you took forbearance, here is what’s actually coming, what your real options are, and how to think about whether selling is on the table.

What happens when my CARES Act forbearance ends?

Your missed payments don’t disappear. The servicer offers four typical options when forbearance ends: lump-sum reinstatement, a 6 to 12 month repayment plan added to your regular payment, a deferral or partial claim that pushes the missed amount to the end of the loan, or a full loan modification. The CFPB’s mortgage assistance hub explains each option, and agency loans usually qualify for the deferral path.

What Forbearance Actually Was

The CARES Act, signed in March, gave homeowners with federally-backed mortgages the right to forbearance for an initial 180 days, with an option to extend another 180. “Forbearance” means the servicer agrees not to collect the regular monthly payment for that period.

It does not mean the payment is forgiven. It does not mean the loan is paid off. It means the missed payments accumulate, and at the end of the forbearance period, the homeowner and the servicer have to agree on a way to handle them.

Most NC homeowners I talk to who took forbearance in March or April are now somewhere between months 4 and 6 of their initial period. The first wave of forbearance plans expires in September and October. Servicers are reaching out 60 to 90 days ahead to start the repayment conversation.

If you took forbearance, you should already have a notice from your servicer. If you don’t, call them this week and ask for your forbearance end date and your options for repayment.

The Four Repayment Paths

Servicers generally offer four options when forbearance ends, though not all four are available on every loan:

Reinstatement. Pay all missed payments at once in a lump sum. If you missed six $1,800 payments, that’s $10,800 due. For most homeowners who needed forbearance in the first place, this is not realistic.

Repayment plan. Spread the missed payments over the next 6 to 12 months on top of your regular monthly payment. Same example: $1,800 monthly payment plus $900 to $1,800 of catch-up, so $2,700 to $3,600 a month for the next year. Most homeowners cannot absorb this either.

Deferral / partial claim. The missed payments get pushed to the end of the loan as a non-interest-bearing balance, due at payoff or refinance. For Fannie/Freddie/FHA loans, this is the homeowner-friendly option. The regular payment resumes at the original amount and the missed amount becomes a balloon at the end. The good news: most agency loans are offering this. The catch: it requires the servicer to actually process it, and processing has been slow.

Loan modification. The terms of the loan get restructured, usually extending the term, sometimes reducing the rate, sometimes capitalizing the missed amount. This is for homeowners whose income hasn’t recovered. Modifications take 60 to 120 days to underwrite and they require documentation of hardship and current income.

If your servicer is leading with “reinstatement” or a tight repayment plan and not mentioning deferral, ask specifically about deferral or partial claim. For agency loans, you are likely entitled to it.

The Loans That Don’t Get Federal Protection

This is where the conversations get harder. CARES Act forbearance only applies to federally-backed mortgages: Fannie Mae, Freddie Mac, FHA, VA, USDA. That covers maybe 70% of NC mortgages.

The other 30% includes:

Portfolio loans held by smaller banks. Many community banks in NC offered their own forbearance, but the terms vary widely.

Private mortgages, including seller-financed deals and hard-money loans. These were almost never under federal forbearance authority. Some lenders worked with borrowers, some didn’t.

Second mortgages and HELOCs. Federal protection covers first liens. A HELOC or a second from a different lender is a separate conversation, and many borrowers focused on the first and let the second slide. Those second-lien servicers are now calling.

Contracts for deed and land contracts. No federal protection. Whatever the contract says, applies.

If you have a non-agency loan and you skipped payments without a formal forbearance agreement, you may already be in default territory. The servicer may already be referring the file to foreclosure counsel. You should know exactly where you stand within the next 30 days.

When Selling Is Actually the Right Move

Forbearance is buying time, not solving the problem. For some homeowners, the problem will solve itself: the job comes back, income recovers, the deferral pushes the missed payments to the end of the loan, and life resumes. That’s a real outcome and it’s the most common one.

For other homeowners, the math doesn’t recover. Maybe the job lost in March is not coming back. Maybe the second income earner is permanently out. Maybe the medical issue that triggered the forbearance is going to keep affecting income for another year. In those cases, selling now beats foreclosing later.

Here’s the math I run with sellers when they call:

Take the realistic monthly cost of keeping the property going forward: full mortgage payment, taxes, insurance, basic maintenance. Add in the catch-up amount the servicer is requiring, if any. Compare that to a realistic estimate of household income for the next 12 months. If income clearly covers the costs with margin, keep the house. If income is short by even a few hundred dollars a month, you’re going to spiral, and the house will be in active foreclosure within a year.

If the math doesn’t work, selling now while the market is strong gets you out with equity. North Carolina’s market this summer has been startling. Inventory in Wake, Mecklenburg, and Durham counties is way down from a year ago, prices are up despite everything, and cash buyers are paying close to retail in some neighborhoods because there’s so little to compete for. For homeowners with mounting expenses, downsizing into a smaller property and clearing the mortgage entirely is sometimes the cleanest answer.

Selling pre-foreclosure preserves credit. Selling post-foreclosure does not.

The Specific NC Timeline

If a homeowner stops paying after forbearance ends, NC’s foreclosure process takes about 6 to 9 months from the first new missed payment to a courthouse sale. The clerk of Superior Court in the county where the property sits hears the foreclosure under NCGS § 45-21. There’s a Notice of Hearing, the clerk’s hearing, a Notice of Sale published twice in a local paper, and then a 10-day upset bid period after the auction.

That timeline gives a homeowner real time to act, but every month makes the options narrower. By the time the Notice of Sale is published, you’re looking at maybe 3 to 5 weeks before the auction. A 14-day cash close is possible in that window. A traditional listing is not.

If you are in Charlotte or Raleigh and you are pretty sure your post-forbearance math doesn’t work, call us before you stop paying. Once new missed payments start, the foreclosure clock starts ticking, and we lose flexibility on the offer because we’re working against a sale date.

What I Wish Sellers Did Differently

A few patterns from August’s calls that I want homeowners to think about.

A lot of sellers are still in denial about the deferral. They got the servicer letter, didn’t understand it, set it aside, and assumed the missed payments evaporated. They didn’t. Open the mail. Read it. Call the servicer.

Some sellers are taking the repayment plan when deferral was offered, because they didn’t understand the difference. Always ask: “Is deferral or partial claim available on my loan?” If the rep says no, ask for a supervisor.

Almost every seller waits too long to consider selling. The pattern is: forbearance ends, they take a repayment plan they can’t really afford, they fall behind by January, and they call me in March panicking about a Notice of Hearing. By then we have less to work with.

The math is easier in August than it will be in March. Your house is worth more right now than it will probably be worth a year from now if forced into foreclosure timing. Cash buyers like us are paying more aggressive numbers in this market because demand is genuine.

The Conversation to Have This Week

If you took forbearance and you’re not 100% sure you can absorb the post-forbearance payment plus any catch-up, do these three things this week:

Call your servicer. Get the exact end date, the missed amount, and a written list of available repayment options.

Run your real budget for the next 12 months. Not the optimistic version. The version where the contract job ends in February.

If the math is tight, talk to someone who can quote you a real cash offer on the property today. If the number works, you have an exit. If it doesn’t, at least you know.

I take calls at (845) 316-1119 directly. Not a call center, not a lead aggregator. If you tell me you took forbearance and you’re trying to figure out what’s next, I’ll pull comps for your area, give you a realistic offer range over the phone, and we can walk through whether selling makes more sense than fighting through another year of underwater payments.

Forbearance was a bridge. The other side of the bridge is here. Make sure you know which way you’re walking.