For many folk impacted by the Covid-19 virus who elected to suspend or put their mortgage payments in forbearance for three months, the end of the suspension was June or will be this July. It is important to know your options in addressing those 3 months of payments, as the missed payments don’t automatically go away.
If you have a government-backed loan such as Fannie Mae, Freddie Mac, FHA-insured, VA-guaranteed, or USDA loan, you have options through the government that can include putting the missed payments at the end of the loan with no interest, repaying over the next three to six months, or possibly modifying the loan. For more detailed information and instructions to determine if your loan is backed by the government and your options, see the National Consumer Law Center’s article “Mortgage Relief for Homeowners Affected by COVID-19” at https://library.nclc.org/mortgage-relief-homeowners-affected-covid-19.
If you have a private mortgage, however, there are no laws requiring your lender to put the missed payments at the end of the loan without interest. We are learning that many lenders are expecting homeowners to cure the three missed payments with a lump sum immediately, to make double payments over the next three months, or when they are offering to put the missed payments on the end of the loan, they add interest which adds thousands and thousands of dollars to your mortgage balance.
In addressing this with your lender, first ask the representative for all the options. And, if the proposed options don’t work for you, suggest your own solution. Ask to spread the sum over a time that works for your schedule. If the lender offers to put the arrearage to the end, make sure to ask if it will be interest free or will interest be accruing on the sum. AND, make sure whatever agreement you reach is provided in writing so you have proof of the agreement. Always ask the lender’s representative to send you a letter or email with the terms of the agreement!
But, if you find yourself unable to reach agreement or unable to overcome the financial hurdles put in you path by Covid-19, it may be time to talk to us about bankruptcy options. We can stop foreclosures and repossessions and force the lender into plans that let you keep the assets important to you, and often eliminating a large part of your debt. We cannot cure Covid-19, but we can cure some of the financial ills caused by it. Call us at 981-9000 today if you need a financial checkup.
For many folk impacted by the Covid-19 virus who elected to suspend or put their mortgage payments in forbearance for three months, the end of the suspension was June or will be this July. It is important to know your options in addressing those 3 months of payments, as the missed payments don’t automatically go away.Click to View Linked Article