With so much focus on lack of housing inventory — while a record number of buyers are seeking homes on Cape Cod — not enough time has been spent talking about those homeowners, who have found it it challenging to make their mortgage payments because of the virus crisis.
The government initiated a forbearance program to provide much-needed support for these homeowners. But, many who are eligible have not used it, because they’re simply not familiar with it or pessimistic or unsure that they qualify.
But, there’ still time. Unless extended again, some of these plans and corresponding mortgage payment deferral options will expire soon. If your loan is backed by HUD/FHA, USDA, or VA, you can apply for initial forbearance by June 30, 2021.
Here’s what you need to know.
Who can apply.
This is how the Consumer Financial Protection Bureau (CFPB) explains the program:
Forbearance is when your mortgage servicer or lender allows you to pause or reduce your mortgage payments for a limited time while you build back your finances.
Forbearance doesn’t mean your payments are forgiven or erased. You are still obligated to repay any missed payments, which, in most cases, may be repaid over time or when you refinance or sell your home. Before the end of the forbearance, your servicer will contact you about how to repay the missed payments.
According to the CFPB, you may have a right to a COVID hardship forbearance if:
- You’re experiencing financial hardship directly or indirectly due to the coronavirus pandemic.
- You have a federally backed mortgage, which includes HUD/FHA, VA, USDA, Fannie Mae, and Freddie Mac loans.
For mortgages that are not federally backed, servicers may offer similar forbearance options. If you are struggling to make your mortgage payments, lenders are generally required to discuss payment relief options with you, whether or not your loan is federally backed.
Forbearance is not expensive.
According to CFPB: “For most loans, there will be no additional fees, penalties, or additional interest (beyond scheduled amounts) added to your account.” You also do not need to submit additional documentation to qualify. You can simply tell your servicer that you have a pandemic-related financial hardship.
But, it’s important to contact your mortgage provider (the company you send your mortgage payment to every month) to explain your current situation and determine the best plan available for your needs.
The process to apply is rather simple.
- Find the contact information for your servicer
- Call your servicer
- Ask if you’re eligible for protection under the CARES Act
- Ask what happens when your forbearance period ends
- Ask your servicer to provide the agreement in writing
Our homes are our biggest asset. If you are having difficulty making your mortgage payments, there’s still time to take advantage of critical relief options to help keep you in your home.
You need to contact your mortgage provider to determine if you qualify. If you have other concerns or questions about the housing market, please don’t hesitate to contact us at 508-568-8191 or email@example.com. We’re happy to assist you in any way we can.
Don’t wish for it; go for it!
Mari and Hank