What REALTORS® Need to Know About Mortgage Forbearance

Understanding how it still affects today’s housing market

Mortgage forbearance was a financial lifeline for thousands of New Mexico homeowners during recent economic challenges. While the program helped many avoid foreclosure, its long-term effects are still shaping how homes are bought and sold today.

As market advisors, REALTORS® play a critical role in helping clients navigate the lingering impact of forbearance—whether working with a seller who paused payments or a buyer curious about how these programs affect local inventory and pricing.

What Is Mortgage Forbearance?

Mortgage forbearance allows a borrower to temporarily pause or reduce their mortgage payments due to financial hardship—such as job loss, illness, or unexpected expenses. It’s important to note that forbearance is not forgiveness. Homeowners must repay the missed payments later, either through a repayment plan, deferral, or refinancing option.

Why It Matters for REALTORS®

1. Sellers in Forbearance May Face Closing Challenges

If a homeowner is selling while still under forbearance, the deferred balance must be addressed at closing. REALTORS® who ask early about forbearance status can help clients avoid delays, ensure accurate payoff amounts, and protect the integrity of the transaction.

2. Forbearance Helped Shape Today’s Market

During the pandemic, widespread forbearance programs prevented a surge of foreclosures, stabilizing home values and tightening inventory. That protection continues to influence the Albuquerque metro area, where limited supply has kept prices strong and demand steady.

3. Due Diligence and Transparency Are Essential

Whether representing buyers or sellers, REALTORS® should encourage open communication about forbearance history. Understanding the lender’s requirements can prevent last-minute surprises with financing or title clearance.

4. Monitoring Future Market Trends

If forbearance repayment plans fall through, foreclosure risk may rise. REALTORS® who track these indicators are better equipped to anticipate shifts in supply, advise clients on timing, and support community stability.

5. Knowledge Builds Client Confidence

Clients depend on REALTORS® to translate complex financial realities into clear guidance. Demonstrating awareness of mortgage forbearance—and linking them to trusted NAR resources—builds credibility and reinforces your value as a local market expert.

Mortgage forbearance continues to influence housing dynamics in subtle but important ways. By staying informed, REALTORS® can better serve clients, protect transactions, and maintain the professionalism that sets our industry apart.

For a deeper dive into how forbearance is affecting homeowners nationwide, read the full NAR article: Mortgage Forbearance and Its Impact on Home Sales