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Coronavirus Mortgage Relief

Are you struggling to pay your mortgage because of the coronavirus pandemic? Read on for information on what to do and options for relief.

First, assess your situation

Pay your mortgage, if you can.

Mortgage servicers are overwhelmed with calls at this time. Those who are not able to pay their mortgage need to be helped first.

Can’t pay your mortgage, contact your mortgage servicer as soon as possible.

Due to high call volume it could take some time to reach your loan servicer. Be patient and understand that they too may be impacted by this.

Have a federally backed mortgage?

Do you have a FHA, USDA, VA, HUD or Fannie Mae or Freddie Mac federally backed mortgage? For federally backed mortgages such as these, the CARES Act has two protections for homeowners:

  1. Foreclosure moratorium – your lender may not foreclose on you for 60 days after March 18, 2020.
  2. Forbearance for homeowners experiencing financial hardship due to COVID-19 – you may request to have your mortgage payments paused or reduced for up to 180 days. You may also request an extension for up to an additional 180 days. The missed or reduced payments will be repaid at a future date. Contact your loan servicer to request this option.

Non federally backed mortgages

If you have a mortgage that is not backed by a federal agency, contact your servicer immediately if you are unable to make payments. Financial institutions have been encouraged to work with borrowers that are unable to make their payments because of COVID-19.

Additionally, several states are offering mortgage relief options. Check the government website for your state to see what programs or options are available.

How to request mortgage relief

First, contact your servicer. Be sure to have your account number when you call.

Be prepared to explain:
  • Why you are unable to pay your mortgage
  • If this is a temporary or permanent situation
  • What your income is or will be, what expenses you have, and what other assets you have such as cash in the bank
Ask:
  • What options are available to help you?
  • Can payments be suspended or reduced temporarily?
  • Will late fees be waived?
  • Are there any other fees you will be charged?
Get it in writing

Once you and your loan servicer come to a mortgage relief agreement, ask for written documentation confirming the details of the agreement. Be sure you understand the terms of the agreement. Some forbearance programs may require you to pay all of your missed payments at the same time or the payments may be added on to your mortgage, make sure you understand what you are required to do.

Reference:

Guide to coronavirus mortgage relief options. (2020, April 6). Retrieved from Consumer Financial Protection Bureau: https://www.consumerfinance.gov/about-us/blog/guide-coronavirus-mortgage-relief-options/

 

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