COVID 19 has come with not just a health emergency but also a financial crisis. Whether as a homeowner, business owner, employee, everyone no doubt has been hit hard by the financial impact of the deadly virus as it tightens its grips across countries. In the wake of the coronavirus economic downturn, the government has come out with a number of relief measures to ease the financial burden that the ongoing crisis brings along.
If the pandemic affects your wealth as well as your health. You have lost your job, your income has been reduced, and you are finding it hard to pay up for a mortgage, here are relief options you should know about.
Mortgage Relief Options
If you are unable to pay your mortgage due to financial hardship during this pandemic, a new protection law has been put in place, CARES Act, to protect homeowners and renters. To be eligible, your mortgage must be federally insured or owned or it must be backed by one of the federal agencies or Fannie Mae or Freddie Mac. This will determine the type of mortgage you are entitled to. However, if you don’t have a government-owned or GSE backed mortgage, contact your provider for coronavirus mortgage relief. The kind of program you have will determine the type of relief you are entitled to. Your mortgage service provider will help you with:
Homeowners can ask their provider for a reduction or suspension of your mortgage payments for up to 12 months. This doesn’t mean your mortgage payment has been erased, canceled or you won’t have to pay for those missed days.
Late fee waiver:
Late payment will no accrued any additional charges for late payment or late fees or additional interests during your forbearance plan period.
Suspension of foreclosures:
Foreclosures happen when a homeowner fails to make a payment on a mortgage and the lender takes back the property. Foreclosure relief under the CARES act is available from March 27, 2020. Suspension on foreclosures varies from state to state or your mortgage program.
If you have a problem making payments for the due dates or at the end of the relief period, you have other payment options which include:
- Repayment plan: if you want unable to pay your due amount all at once and you want to catch up gradually, you can spread out your missed payments on your current mortgage payment for a period of time or months.
- Payment deferral: the missed payments is moved to the end of the mortgage term without attracting any charges or fees. This means as a homeowner, you return to the normal regular mortgage payment once you are backed on your feet. The payment continues just like it was before the pandemic.
- Loan modification: if you are facing financial struggles and you cannot meet up with the amount agreed on between you and the borrower, you can ask for modifications. Modification outside the original mortgage terms enables you to reduce payment at an amount convenient for you.
Protection for renters:
If your rent is from an owner who has GSE-backing or is government-insured or owned, the Act provides for a suspension or moratorium on evictions. For other renters who have the means can still pay their rent during the eviction plan. However, those who are cannot afford the rent payment can discuss it with their landlords and look for possible solutions.
Ask for Coronavirus (COVID-19) Mortgage Help:
Contact your mortgage servicer to understand which options you are eligible for and for guidance on your mortgage payments. In the light of coronavirus, mortgage servicers are experiencing an increased number of calls and it may take a while for them to respond. Make sure you have all the questions or information in handy before putting the call through.
Beware of mortgage relief scams:
Scammers are preying on vulnerable homeowners and renters during this period of crisis. While some make fake promises such as helping consumers to get a money-back guarantee. Others claim they are worked with your service provider or government. Plus, there are also mortgage servicers that are lying, promising reliefs yet with no positive results. Understand the CARES ACT includes the protection of consumers against scams. It includes that no lender is allowed to collect charges or fees from homeowners until an offer of relief has been given. This means you are not to pay any charges to your lender until you get the financial relief or desired result.
For coronavirus assistance information or Coronavirus (COVID-19) Mortgage Help, check the Department of Housing and Urban Development’s (HUD)website. This is a Disaster Response Network with approved counselors that will be more than willing to offer help. Besides, you can contact the Home ownership Preservation Foundation. A non-profit organization in partnership with governments and mortgage companies is helping homeowners, renters, and buyers to loan, modification, prevent foreclosures and even offer to counsel.