Can I receive mortgage forbearance? Is mortgage forbearance available for my situation and how can I get it?
The current coronavirus crisis has caused havoc in many peoples lives. Many people in the US through no fault of their own have fallen onto hard times. However, with the recent CARES Act our government has put in place some temporary measures to help those in need.
The CARES Act
The 2 Trillion Dollar CARES Act was signed into law in March of 2020. The Act was designed to put measures in place to help those in financial need due to the Covid-19 crisis. Under the CARES Act homeowners needing mortgage relief, may be able to seek and get assistance. Those that qualify, may be able to defer their mortgage payments for up to a year without penalties of fees.
Forbearance is not a forgiveness of debt. You will still own the money and have to pay it back!
Please understand, forbearance does not mean you can stop making your mortgage payments without consequence. And, it is also important to note, not all loans are covered and the relief may not kick in right away!
Seeking Forbearance – Where to Start
Contact Your Loan Servicer
When seeking forbearance your first step will be to contact your loan servicer. Keep in mind that only federally backed Government Loans are covered. These would include loans owned, secured or guaranteed by a variety of government agencies. Agencies like Fannie Mae, Freddie Mac, HUD, VA and the Department of Agriculture.
When you contact your loan servicer they will know what entity is behind your mortgage. And they will be able to quickly tell you if your loan will qualify for forbearance under the CARES Act. However, according to the Consumer Financial Protection Bureau’s website, even if your loan is not covered your loan servicer or state may have other options!
Make sure you have your loan number handy when you call.
Have paper and pen to take good notes, and be patient. Wait times on hold could be long! These are not normal circumstances.
Important Questions To Ask Your Loan Servicer
- What are my options to stop or suspend my mortgage payments under the CARES Act?
- Are their other options such as a Loan Modification, Forbearance or Refinancing that could help me?
- Can you waive my late fees and penalties?
- How will this affect my credit?
Your Forbearance Agreement
Once you are offered forbearance you will have a new set of terms and guidelines affecting your mortgage. Make sure you understand the fine print and ask plenty of questions. You forbearance agreement will be deferring some or all of your payments for a set period of time. It’s important for you to fully understand this new agreement with your lender, or you may create a new problem down the line.
Other Options
When people encounter financial hardships, the solutions are typically not a one-size-fits-all! Over the years we have helped numerous folks that have encountered financial hardship in may different ways. Below is a list of some of the options that can work to help folks in a variety of situations.
- Forbearance
- Refinancing
- A Short Sale
- A Normal Sale
- Deed In Lieu Of Foreclosure
While each of these options may not be the perfect solution for everyone, they are options none the less. Each will have a benefit and an a consequence that should be throughly investigated before moving forward. Protecting your financial future should be the goal. It took many people a long time to recover from the 2008 housing crisis and you’ll want to avoid that if at all possible.
If you have questions about your situation, call Bill Byrd at 843-972-7670. Since 1986 Bill has been helping folks navigate challenging situations in real estate. Bill has the resources and connections to make sure you receive the right guidance for any challenge you face in real estate.
The Author…
Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped numerous families and individuals during the previous housing crisis you can feel comfortable that Bill’s experience and expertise is unparalleled in our market. More About Bill
