Homeowners are struggling to keep up with the payments on their homes. Homeownership may be in the biggest crisis of the century as Americans fight to make ends meet amid the coronavirus recession.
What options do you have if you are falling behind in your payments?
Hi everyone, I’m Jordan Goodman, America’s Money Answers Man, and I’m here to help you understand what alternatives you have if you’re worried about staying current with your mortgage payments.
A whopping 32% of Americans were behind in mortgage payments. That’s huge! And with the Federal moratorium on foreclosures having expired at the end of August, things are getting unpleasant quickly.
Making things worse is the shortage of affordable housing options. Too few smaller, affordable residential homes have been built in the past few years, particularly in places with lots of jobs. Many who could afford to buy a home already did but were stretched financially thin before the coronavirus hit.
The House and Senate haven’t been able to work out another relief bill to follow up on the CARES ACT. That has left millions of homeowners teetering on the edge of disaster.
Having trouble making your mortgage payments due to covid-19? Then look into mortgage forbearance to help you get through the hardship. Forbearance means your mortgage lender or servicer allows you to reduce or pause your mortgage payments for a limited time. You’ll still have to pay any reduced or missed payments plus interest later. Any homeowner with a mortgage may qualify for forbearance, but homeowners with Federally backed mortgages, such as a FHA, VA, USDA, Fannie Mae or Freddie Mac loans are entitled to mortgage forbearance under the CARES Act. You have a right to ask for and receive a forbearance for up to 180 days and to obtain an extension for another 180 days if you need it. Regardless of whether your mortgage is covered under the CARES Act or not, you need to call your lender to request mortgage forbearance. You can find out more about your rights and what to expect from www.consumerfinance.gov.
Loan modification is when you and your lender agree to new terms for your mortgage without refinancing. This could be lowering monthly payments, reducing interest rates, lengthening the term of your loan or adding any delinquent payments to the amount that you owe. The goal of loan modification is to keep you in your home and avoid foreclosure. You can request loan modification with or without having a mortgage forbearance in place first. If you are in this situation, contact my affiliate RBI Mortgage Loan Modification which will refer you to a nearby lawyer who specializes in modification.
RBI Mortgage Modification: https://cutt.ly/mortgagemod
Both forbearance and modification are likely to damage your credit score but the ding to your score will be far less than missed payments or foreclosure. Make sure you understand repayment terms before you agree to either, keep meticulous records of every contact you have with your lender, noting who you talked with and what was decided.
If keeping up with mortgage payments is a challenge, don’t wait till you’ve missed payment to start exploring mortgage options like forbearance and modification. Chances are you’ll have more options before you’ve gone into arrears and you’ll certainly have a better likelihood of keeping your home.