Mortgage Relief & the CARES Act

I received this article from a mortgage lender and thought it was helpful information to pass along to my clients to ensure they are aware of the potential for mortgage forbearance and what that actually means for homeowners.

"Let's set the record straight - there is no such thing as "skipping" a mortgage payment.

The recently announced mortgage payment relief through the CARES Act provides mortgage forbearance for those who have lost their job or are suffering a financial hardship due to the COVID-19 pandemic and whose loan is federally owned or backed by a federal agency.

Reach out using the contact information on your loan statement to determine what options may be available to you through your servicer.  It's vital that you discuss options based on your situation.  If assistance is available, be sure to get your agreement in writing.

Please remember: A forbearance is not a holiday.  A forbearance allows you to pause or reduce your payments for a limited time. Deferred payments may be due in full at the end of the forbearance period. Sometimes, these payments may be stretched over a short time period or perhaps added to the end of your loan term.

If you have an escrow account, deferring payments will mean you will also have to make up the shortage as part of your repayment plan.

The CARES Act intends to prevent negative impacts to your credit if you undertake a forbearance for your government backed loan. However, changes to reporting between servicers and credit agencies may not occur seamlessly. If you do pursue a forbearance, you will need to monitor your credit report to catch and report any errors that may happen.

Think it through.  A forbearance is not forgiveness. It does not eliminate payments; it only delays them. If you have emergency savings, available lines of credit or other means to pay, these may be better options to get you through these difficult times."

Talk with your mortgage lender and/or servicer to discuss your options. It's possible refinancing or obtaining a HELOC might be the right solution for you in lieu of forbearance.

Team Irwin, Directors Mortgage