MI-LOAN PROGRAM FORBEARANCE

The MI-LOAN Program offers two forbearance options. The chart below shows how each option affects the regular monthly payment amount and total loan indebtedness.

OPTION 1 - Principal Forbearance
During the forbearance period, you are billed each month for only the interest which is due on the loan. Principal forbearance is processed for 12-month periods, with a cumulative maximum of sixty (60) months. The monthly payments you make will not reduce the principal amount of your loan. At the end of the forbearance period, monthly payments of principal and interest will be required. Your payment amount may increase from the payment amount originally disclosed, if necessary in order to pay off the loan within the maximum 25-year repayment period.

OPTION 2 - Principal and Interest Forbearance
This option results in the postponement of payments (principal and interest). Principal and interest forbearance is processed for 12-month periods, with a cumulative maximum of sixty (60) months. During the forbearance period, you will receive no monthly billing statements. However, interest will accrue and at the end of the forbearance period, the unpaid accrued interest will be added to the principal balance of your loan (capitalized). Because interest charges are calculated on the outstanding principal balance, capitalization will increase the total amount of interest charges you will pay. At the end of the forbearance period, monthly payments of principal and interest will be required. Your payment amount may increase from the amount originally disclosed, if necessary in order to pay off the loan within the maximum 25-year repayment period.

NOTE: Release of Cosigner Option and Forbearance

Effective November 21, 2014:

Upon request from the borrower for their cosigner(s) to be released from all obligations on a Creditworthy MI-LOAN all the following requirements must be met.

1. The most current twenty-four (24) regular monthly payments of principal and interest must be paid consecutively and on time. If the loan(s) are in Interest Only repayment, then this is the payment amount that must be paid consecutively and on time.

2. The most current twenty-four (24) regular monthly payments are not consecutive if there was forbearance usage during this 24 month period.

3. The borrower must currently meet the following credit standards:

   1. A debt-to-income ratio that does not exceed 45.0%.
   2. The most current two years must show continuous employment, with the exception of retired individuals who are exempt from this standard.
   3. A credit history review involving factors such as – minimal credit delinquencies, current account status, level of debt and no derogatory public records (tax liens, etc.).

The table above shows how selecting a forbearance option may increase the regular monthly payment amount and the total loan indebtedness. For illustration purposes, the example shows a MI-LOAN Program loan in the amount of $10,000 at a fixed interest rate of 6.95% with a 25-year repayment term after utilizing five years of forbearance.

By making regular payments and not using forbearance, the total amount of principal and interest paid on the loan is $20,923.50. Option 1 raises that amount by $902.65, while Option 2 raises it by $9,043.96.

Either you or your cosigner, if applicable, may ask for forbearance by phoning, faxing or mailing (faxed and mailed requests must be signed) a request to our loan servicer, Firstmark Services, at:

Firstmark Services
PO Box 82522
Lincoln, NE 68501-2522

888-295-0902 (toll-free)
866-258-9222 (FAX)

All borrower options and benefits are subject to change.