You may know that help is available for those suffering financially from the coronavirus pandemic, but you may not know just how to secure the mortgage relief you need to get by over the next month or two.
Fortunately, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a sweeping stimulus package that gives you some options when it comes to mortgage assistance and forbearance.
Here’s how to get help from the CARES Act and more.
1. Understand Your Options
The CARES Act rolled out rules and guidelines for temporary financial leniency on mortgage payments in some circumstances. However, this leniency is only applicable to loans that are funded by a federal agency, like Fannie Mae and Freddie Mac.
Here’s what they offer:
Delayed foreclosures for non-payment for 60 days or more
The option for homeowners to request forbearance on their mortgage payment for up to 180 days
Up to six months additional forbearance if the homeowner is still experiencing financial hardship caused by COVID-19
Credit protection for missed payments in mortgage forbearance
Mortgages funded by the private sector are not included in this relief. However, many state and city governments have worked with financial institutions to strike deals that prevent foreclosure for a time or allow for forbearance options.
When it comes to understanding all the help available to you, your next step is to:
2. Understand Your Eligibility
Now that you know what the stimulus package offers, you need to find out which parts of it apply to you.
First, find out who owns your loan. You may already think you are out of luck because the mortgage servicer you go through is not a governmental agency. However, the actual owner of the mortgage might still be affiliated with one of the federal institutions that provide relief through the CARES Act. These agencies are:
Department of Agriculture
Department of Housing and Urban Development
Department of Veteran Affairs
Fannie Mae
Freddie Mac
Federal Housing Administration
To find out if one of these institutions funds your mortgage loan, review your mortgage documentation or give your loan servicer a call. Your mortgage servicer is the same company that you make your monthly payments to, and they will be able to tell you who owns the loan. You can also use these Fannie Mae and Freddie Mac quick look-up tools to determine if your loan is through them.
Second, understand that your eligibility for forbearance options is contingent to you providing an affirmation that you are suffering from financial difficulties caused by COVID-19. No other proof should be needed.
3. Be Thorough and Considerate When Contacting Your Mortgage Servicer
You will not just get mortgage forbearance automatically despite your eligibility. That means you need to contact your mortgage servicer to let them know your circumstances.
This could require multiple phone calls and thorough work in educating yourself on all the help available to you as well as what the terms of potential agreements really mean. Do not assume the situation is taken care of until you have definitive proof of an agreement (more on that momentarily).
Then, understand that the representative you are working with has to check a list of boxes in order to ensure you get the relief you need. Chief among these for COVID-19 relief is the requirement that you make a clear assertion that the reason for your forbearance request is due to financial hardship caused by the pandemic. It may feel unnecessary or accusatory, but providing the representative with the statements they need is essential to getting the assistance you need.
Times are stressful and the process can be frustrating, but maintaining a calm and polite demeanor with any customer service representative all but guarantees you are going to find a satisfactory solution.
4. Understand What’s Offered
Whether you receive forbearance from a federal institution or are able to acquire it from the private sector, the rules are going to vary. Mortgage relief can either add the missed payments to the end of your mortgage, giving you financial relief for a longer period of time, or they can make all missed payments due at the end of the forbearance period.
Understanding when your missed payments are due is essential for keeping your head above water. If all your payments will come due at the end of the deferral period, you need to contact your loan servicer to work out lower payments or loan modifications that can increase your breathing room when it comes to making up missed payments.
Also be sure to only request the forbearance time you will need. If that isn’t the full 180 days, make that clear to your lender. Forbearance or deferral is not forgiveness, and while you aren’t making a mortgage payment, you still accrue interest.
5. Get Your Agreement in Writing
You’ve worked out all the details on your mortgage relief option, but for peace of mind and security you don’t want to assume all is well until you have copies of your agreement in writing. Have your loan servicer send you copies of all documentation to your home address or email for your records.
Then, thoroughly review the monthly mortgage statements you receive for potential errors. These statements should indicate that despite forbearance your mortgage is current and up-to-date. This will keep your credit score from taking a blow while you recover from the financial difficulties the pandemic has created.
Since the CARES Act provides credit protection for homeowners who have been current on their mortgage but need forbearance, your mortgage servicer should not be reporting missed payments as long as you’ve followed all the proper steps in acquiring mortgage relief.
Additionally, they should not be charging any additional late fees or penalties for deferred payments, per the CARES Act.
Ask for Help
The coronavirus pandemic has brought on many challenges that most of us never would have expected – let alone planned for. If you’re in need of assistance in making your mortgage payments, do not hesitate to make use of available relief options like these. Defer your mortgage payments if needed and give yourself some room to get back on your feet after financial hardship. Better days are coming.
Stay safe and remember that we are all in this together.
For more information on real estate and property management during the coronavirus pandemic, contact 208.properites today.