Trouble Paying Your Mortgage? Don’t Wait. Talk to Your Loan Servicer Now
In these difficult times, your home is more important than ever. But what if you’re worried about keeping your home? If you are concerned about paying your mortgage, you need to act before you miss a payment.
There are specific relief plans in place if your hardship is a direct result of COVID-19. The Coronavirus Aid, Relief, and Economic Security (CARES) Act offers forbearance for up to 180 days (plus a 180-day extension) on VA, FHA and USDA loans and loans backed by Fannie Mae and Freddie Mac. There’s a moratorium on foreclosures for these loans, too. Many states have created their own programs and you’ll find more information on your state government website.
Start by talking to the company you send your mortgage payment to each month. That’s your lender or loan servicer. Be proactive. The sooner you talk to them, the more options you’ll have.
Make sure you have this information on hand when you call:
- Most recent mortgage statement and account number
- Current and future income estimates
- Current expenses estimate
- Documentation of what caused your hardship
There are options even if your loan is not covered by the CARES Act:
- Forbearance: your lender reduces or suspends your payments for a time if your hardship is temporary
- Refinancing: if you have a higher interest rate loan, refinancing to a lower rate could lower your monthly payment enough to make it affordable
- Loan Modification: your lender may offer new loan conditions, such as a lower rate or longer term. Make sure your lender will report your payments as on time and current
- Debt Settlement: your lender agrees to settle for a lower amount than the original loan. This will affect your credit rating
- Repayment Plan: your lender offers you a plan so you can catch up if you are already behind on your payments
Follow these tips:
- Document every call, email and letter. Note the time, date and name of the representative you contact. Save copies of anything you send to the lender
- Watch your deadlines. Don’t miss any due dates
- Don’t move or rent your home. Your agreement may only apply to your primary residence
- Once you have an agreement, get it in writing
Don’t wait if you are concerned about making your mortgage payments. Find your servicer by checking your mortgage statement and call right away. Discuss your options, and make sure to ask questions about any agreement. You need to be sure you understand the terms of the proposal, no matter what type of relief is offered. One final word of advice. There are scammers offering mortgage relief via emails and online ads. Don’t be fooled. Your loan servicer is your best source of information.