Mortgage Relief is Here
Relief for mortgage payments is here. Congress recently passed the CARES Act which provides relief for individuals with federally backed mortgages.
Relief comes in two forms:
Effective March 18, lenders cannot begin foreclosure proceedings on any federally backed loans for at least 60 days.
Individuals can request forbearance for 180 days. Forbearance can either pause your mortgage payments entirely or reduce your monthly payments during the designated period. If, after the 180 days are up, you still need relief, you can request an additional 180 days of forbearance.
If you need assistance with your mortgage payments, here is what you need to know at this time.
Know Who Owns Your Loans
Relief provided by the CARES Act is only available for federally backed loans. Federally backed mortgages include FHA, VA, USDA, HUD, Fannie Mae, and Freddie Mac loans.
Loans from private lenders may provide some relief, but you must check with them before assuming you will receive any support.
In 2018, over 63% of mortgages were federally backed, but it is still important to check who owns yours. To do so, you can either check your mortgage documents or call your lender and ask. Lenders are required by law to provide you this information.
You can also use tools on the Fannie Mae or Freddie Mac website to determine if either of them own your loan.
Know the Specifics of Your Relief
Talk with your lender to understand the specifics of your relief program. Some may expect you to make all the missed payments during forbearance in one lump sum, while others might just add them on to the end of your current mortgage term
Forbearance is not forgiveness. You will be expected to make up for the missed payments one way or another.
If you are expected to make the payments in one lump sum but cannot, you will need to seek further assistance to avoid foreclosure. Talk with your provider to see if they could lower your monthly payments or other loan modifications.
Be Patient and Keep Track of Communication
The relief from the CARES Act and other programs is not automatically applied to your loan. It is best to take the process one step at a time. Start by reaching out to your loan provider with further questions.
During the entire process, keep track of any communication and all documents. Try to get as much of the communication on paper so that you can refer back to it or have it available if things don’t go as planned.
Be patient! Understand that your loan providers are likely swamped with work. Though they have been considered “essential businesses” during the quarantine, their operations have undoubtedly still been affected.
With mortgage rates at all-time lows, they are further swamped by the number of mortgage applications they are receiving. Do your part by being patient and keeping track of documents.
With news changing, what seems like, every 5 minutes, do your best to stay informed as well. This will make the entire process easier for both you and your lender.
If you are wondering what type of relief is going to be available for you, discuss your options with a real estate specialist. For legal guidance on your mortgage relief options, get in touch with a real estate attorney at Lee Scott Perres, P.C.
