LOS ANGELES (CBSLA) — Millions of Americans entered into forbearance on their home mortgages at the start of the pandemic, but many are now facing questions of what happens next as those payment deferral periods end.

Barbara Loczi, who lives in Moorpark, is one of those whose mortgage and home equity loan were placed in forbearance. But, unlike most people, “We never requested it, didn’t authorize it,” she said.

Loczi said her lender, Wells Fargo, told her that she was placed in forbearance because her son had applied for one.

“My husband’s on my son’s mortgage,” she said. “So, ergo, they made a business decision to issue forbearance on both our mortgage and HELOC, but did not talk to us about it before they did it.”

Now the Loczi’s are trying to refinance their home loan to take advantage of historically low interest rates, but they ran into trouble due to their account’s forbearance — and they’re not alone.

Walter Neil, president of Franklin Loan Center, said homeowners can choose from four different options for paying back their missed mortgage payments, but each option comes with its own set of consequences.

The first option is to pay the missed payments back in full.

“Their mortgage comes out of forbearance, and they’re allowed to then go out and borrow money freely with no issues to their credit,” Neil said.

That’s the option the Loczi’s chose so they could refinance immediately.

“We had to take money out of retirement because we weren’t aware of the fact that the payments weren’t going out,” Loczi said.

The second option is to establish a payment plan, but people who do that will not be able to refinance or borrow money until they have made three consecutive payments.

The third option is a deferral which will tack missed payments to the end of the loan, but people who do that will also have to make three consecutive payments before borrowing money.

“So, someone who picks a deferral option, it may take them 60-90 days to go through the deferral paperwork,” Neil said. “So, they might be locked down and might not be able to borrow money until November or December because of that three month wait period.”

The final option is a loan modification.

“And that’s for individuals who can’t afford to make the payments,” Neil said.

But people who take that option will not be able to borrow money for a full year, Neil said.

The most important thing homeowners can do is know their status with their lender and be proactive.

Wells Fargo said in a statement Friday that it had removed the Loczi family from its forbearance list and was working with them to address any additional issues they might have.

“Customers placed in forbearance received notices of that action through multiple channels, and we removed them from forbearance upon their request,” the company said in a statement. “In the spirit of providing assistance, we may have misinterpreted customers’ intentions in a small number of cases. In those limited cases, we are working directly with the customers.”

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