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Tips for delaying mortgage payments in the era of coronavirus

House Flowering Trees3If you’re unable to make your mortgage payments due to the coronavirus pandemic, you could lose your home to foreclosure. Federal lenders and some private lenders are offering borrowers temporary help, such as stopping or delaying foreclosure or modifying the mortgage. However, these measures aren’t available for everyone.

If you need help, research the options available. The Federal Trade Commission offers these tips for navigating the process.

Learn about new relief for federally backed mortgage

The Coronavirus Aid, Relief, and Economic Security Act or CARES offers two protections for some borrowers. To be eligible, you need to have a federally backed mortgage and be having financial hardship due to the coronavirus. The options include:

  • A temporary suspension – called a moratorium – of foreclosures for 60 days, starting March 18.
  • A right to forbearance for 180 days. That means you can ask your servicer to reduce or suspend your mortgage payments for that time. If after six months, you’re still having trouble paying, you can request forbearance for another 180 days.

Figure out if your mortgage is federally backed. If you don’t know, you can call your mortgage servicer or follow the links below. You can get your servicer’s contact information from your billing statement.

More than half of U.S. mortgages are backed by Fannie Mae or Freddie Mac, and these mortgages count as federally backed.

Fannie Mae

Look up whether your mortgage is owned by Fannie Mae.

800-232-6643

Freddie Mac

Look up whether your mortgage is owned by Freddie Mac.

800-373-3343

If your loan is backed by the Department of Housing and Urban Development or FHA mortgages, Department of Agriculture, USDA mortgages, or Department of Veterans Affairs, VA mortgages, you also may be eligible for relief.

1. Contact your servicer no matter what type of mortgage you have. Tell it your situation and ask what options are available. Even if your mortgage isn’t federally backed, you may still qualify for other help.

If you’re considering forbearance, keep in mind that it’s not loan forgiveness, and ask your servicer what happens after the forbearance ends. Your servicer should be able to tell you if it will extend the loan term so you can make the missed payments later, if your monthly payments will go up to make up the difference, if you will owe the entire unpaid amount in a lump sum, and how forebearance could affect your credit. 

2. Get advice. Contact an approved counselor. Go to the Department of Housing and Urban Development’s list of approved housing counseling agencies to find a counselor in your state who can explain your options. Consider contacting the Homeownership Preservation Foundation or HPF at 888-995-HOPE. HPF is a nonprofit organization that partners with mortgage companies, local governments, and other organizations to help consumers get loan modifications and prevent foreclosures.

3. Check what help is available where you live. Your state may offer additional support. Some states have frozen foreclosures. Find your state government’s website and look for the latest updates on help for borrowers.

4. Watch out for scammers who follow the headlines. It’s tempting to hire a company that says they can get a change to your loan that will reduce your monthly mortgage payment or take other steps to save your home. Unfortunately, many companies use half-truths and even lies to sell their services or they make promises but don’t deliver. Learn more about avoiding mortgage relief scams.

5. Don’t pay up-front for help. Federal law says that even if you hire someone to help you with your mortgage, you don't have to pay them until they deliver the results you want. It's illegal for a company to charge you until you’ve accepted their written offer for a loan modification or other relief from your lender, and you’re free to reject an offer you don’t like. Even if you hire someone, you should always feel free to contact your mortgage servicer directly to see whether they can offer you additional options. Learn more about your rights when it comes to hiring a mortgage relief company.

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