Save Your Home From Foreclosure
Do You Know About Forbearance? It Might Just Save Your Home
As the global economy is strained by the COVID-19 pandemic, many Americans find themselves out of work or having to get by on reduced incomes. This means lots of people are struggling to pay their mortgages — a position no one wants to be in.
Banks, however, have systems and programs in place to address these situations. “Forbearance” is the concept of temporarily suspending or reducing mortgage payment requirements during times of economic strain brought on by joblessness, divorce, disability, disaster, death of a wage earner or other unusual circumstance, such as a global pandemic.
In fact, for homeowners with federally backed mortgages, such as FHA or VA loans, recent legislation enacted by the U.S. Congress offers mandatory protections. The law holds that lending agencies must not foreclose on your home for 60 days after March 18, 2020. The law further mandates that consumers have a right to request forbearance for up to 180 days, and may request an extension of another 180 days after the initial period.
Whatever loan type you have, if you’re having trouble paying your mortgage, call your bank or lender. Many are more than willing to work with you to come up with a plan that enables you to stay in your home while reducing financial pressure.
But . . . before you call your lender, confirm that you absolutely need the help. Low interest rates combined with the economic situation means mortgage loan servicers are very busy right now. Your lender may be inclined to backburner anyone who they determine isn’t in a truly dire situation. And keep in mind that it may take a while before your call is returned.
A couple of options may be available to you to help you get through any temporary economic hardships you may be enduring.
Reduced payments — One option a lender may offer you is a reduction in the amount you are required to pay each month toward your mortgage. This may be a temporary reduction or it may involve a permanent restructuring of your loan.
Suspended payments — Depending on your situation, you and your lender may decide that suspending your payments altogether — for a set period of time — is the best option. This will give you and your family some breathing room to get back on your feet, without fear of losing your home during an already-stressful time.
Keep in mind that putting forbearance into place doesn’t release you from owing those payments or partial payments at some point down the road. Working with your lender, you’ll have to craft the specific terms of your forbearance — the exact numbers, duration, and payback terms. Because, yes, you will have to pay back the full, original amount of your mortgage. Forbearance is temporary help, not permanent forgiveness.
But it’s help that might help you save your home from foreclosure. It’s help that will keep you safe and comfortable while the country recovers from the unprecedented crisis we currently face.
Call us today if you’d like more information about forbearance options.