Relief for Homeowners
Relief for Homeowners
Post Date:
05-07-2020
According to the Mortgage Bankers Association, homeowners seeking payment forbearance has gone from less than 4% to more than 6%. According to financial data firm Black Knight, about 3.5 million home loans in America are already in payment forbearance
During a short-term crisis, lenders can issue homeowners forbearance that allows them to pause their mortgage payments. This procedure has been an available tool to protect lenders and borrowers with natural disasters or temporary emergencies that disrupts normal living and income. In the light of the current pandemic, lenders are not requiring proof of hardship except for a statement from the borrower.
The forbearance options can vary based on whether the mortgage is government-backed like FNMA, Freddie Mac, FHA, VA or GNMA or a privately owned mortgage. The CARES Act addresses the government backed mortgages by offering up to one year's forbearance where lenders cannot foreclose.
When the forbearance ends, several options are possible based on specifics regarding the loan and its legal documents. The borrower can pay the delayed payments and interest accrued in full or there could be an extended repayment plan, or the loan could be modified.
Both FNMA and Freddie Mac have recently said that they do not require a homeowner to repay missed payments all at once at the end of the forbearance plan unless they choose to do so.
Homeowners can sell their home during forbearance. The foreborn amount would be reflected in the unpaid balance for the seller to pass clear title.
If your current financial situation makes it impossible to stay current with your mortgage obligation, contact your lender as soon as possible about what relief options are available. If you stop making payments without going through the process of forbearance, your credit will be adversely affected, and you could end up in default on your mortgage subject to foreclosure.For all your real estate needs, please contact us:
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