Mortgage Relief for Covid-19: What’s Available?
Mortgage relief for COVID-19: the virus did more than affect the health of millions. It also knocked the wind out of millions of Americans’ pocketbooks, making it impossible to make ends meet.
Now that we’ve started the new year here are the latest updates on Covid-19 mortgage relief.
First, for federally backed loans, your lender or loan servicer may not foreclose on you until after February 28, 2021. For loans backed by Fannie Mae or Freddie Mac, they cannot foreclose until after January 31, 2021.
Second, if you experience financial hardship due to the coronavirus pandemic, you have a right to request and obtain a forbearance for up to 180 days.
Mortgage Forbearance Due to Covid-19
Forbearance is when your mortgage servicer or lender allows you to pause (suspend) or reduce your mortgage payments for a limited period of time while you regain your financial footing.
The CARES Act provides many homeowners with the right to have all mortgage payments completely paused for a period of time.
Forbearance doesn’t mean your payments are forgiven or erased. You are still required to repay any missed or reduced payments in the future, which in most cases may be repaid over time. At the end of the forbearance, your servicer will contact you about how the missed payments will be repaid. There may be different programs available.
How to get mortgage relief for Covid-19
If you need to extend your forbearance agreement, contact your lender. You don’t need extensive documentation proving your hardship. You just need to request the extension and follow your lender’s requirements.
If you find you still can’t afford your payments after the forbearance period ends, talk to your lender. Don’t ignore your obligations. Many lenders offer payment arrangements that include:
- Tacking your missed payments onto the end of the loan and extending the term
- Splitting up the payments over an extended period, paying a small amount of the missing payments each month
- Modifying the loan to include the new principal at a lower interest rate
For more information on mortgage relief due to the Covid-19 pandemic visit the Consumer Financial Protection Bureau by clicking on the link below:
Help for non federal mortgage loans
If your loan isn’t backed by Fannie Mae or Freddie Mac, talk to your lender. While they aren’t forced to provide the same programs federally-backed mortgage lenders must provide, many do.
Be honest with your lender about your situation and ask what options you have. They may have a similar forbearance option or another payment arrangement that makes it easy for you to continue affording your mortgage payments despite the economy’s downfall.
Over 62? Is a Reverse Mortgage Right for You?
If you’re over 62 and struggling to pay your mortgage a Reverse Mortgage might be a good option.
Don’t give up
We’re all in the midst of a tough time, but there is plenty of mortgage relief for COVID-19 available whether you have a federally-backed mortgage or a private lender mortgage. The key is to stay in touch with your lender and always ask what programs are available to you.
With the right support, you can catch up on your mortgage payments and not worry about losing your house along with the other stressors COVID-19 has caused for people throughout the United States and around the world.