What To Do If You Can’t Make Your Mortgage Payment Due To Coronavirus
Many homeowners will be facing a financial burden due to Coronavirus and if it is affecting your ability to pay your mortgage you may have more options than you think. As of the writing of this message there has not been any uniform relief among all lenders. There are several proposals but none have been agreed to. Information is coming out quickly and things are changing every day.
#1 Things You Should Do
The most important thing you should do is not bury your head in the sand, don’t run and hide and don’t ignore calls and letters from your mortgage company.
Do You Need To Be Behind On Payments?
Even if you haven’t missed a mortgage payment yet the best thing you can do is pick up the phone or go online to your mortgage servicer (who you make your payment to) and see what options are available to you. If you are pro-active there will be so many things you can do. From what we are hearing many lenders are taking the attitude of “call us before it’s too late.”
Right now, there is money available for mortgage relief, but I expect that will run out. Even if you were able to make your April payment but you’re worried about May I recommend you contact your servicer immediately.
What Are Lenders Doing Now?
At this time we don’t have specific information yet for each lender and type of loan. In part your options will be determined by what type of loan you have, your mortgage servicer and the underlying investor. For example, If you have a jumbo loan you will have different options than a Fannie Mae or FHA loan.
Two terms you may be hearing are loan modification and forbearance. Here is what those terms mean.
Loan Modification – Utilizing the existing mortgage company to refinance the debt or extend the terms of the loan. This may allow the homeowner to catch up at a more affordable level. In the past you had to prove to the lender the reason for default “RFD” has been resolved. I have heard lenders may be more lenient right now.
Forbearance – Lender may be able to arrange a repayment plan based on the homeowner’s financial situation. The lender may be able to provide a temporary payment reduction or suspension of payments. Typically, lenders have required the owner has fixed the problem but that may not be required in this situation. With a forbearance, payments are not forgiven, they are added to the loan.
Something to remember about either scenario is we have not heard anything about property taxes being reduced, delayed or forgiven. If you are like me where my property taxes are half my overall mortgage payment unfortunately either option may not bring long term relief.
Be sure to ask your servicer if any loan modification or forbearance will be reported to a credit agency or if it will affect your credit score.
Can You Call Us?
There will be a lot of crazy information coming out. We are already seeing scammers trying to prey on desperate people. If you hear something is too good to be true and especially if it requires you to pay money in advance it likely is. Although it’s not a focus of our business today I was a mortgage broker for 15 years including during the financial crisis and may be able to help you avoid making a mistake. Anything you tell me will be confidential. It’s possible I can point you in the right direction. Call/text at 512-791-7473 or email email@example.com.