Your mortgage and the impact by the coronavirus epidemic

Because of the coronavirus, many people are facing financial challenges, including paying their mortgage. If you’re unable to make your mortgage payments, a foreclosure could cause you to lose your home. Federal and some private lenders are offering borrowers temporary help. This includes stopping or delaying foreclosure or modifying the mortgage. However, these measures don’t apply to everyone. If you need help, research the options available to you for getting through these tough times.

Learn about available Federally-backed mortgage relief

A new Federal law, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, creates two protections for some borrowers. To be eligible, you must have a Federally-backed mortgage and be experiencing financial hardship because of the coronavirus.

Temporary suspension/moratorium

The first is a temporary suspension of foreclosures for 60 days, starting March 18. Moreover, this is called a moratorium.

Forbearance

The second is a right to forbearance for 180 days. You can ask your servicer to reduce or suspend mortgage payments for that time period. If you’re still having trouble paying after six months, you can request forbearance again.

Figure out if your mortgage comes from a program with support from the Federal government. You can call your mortgage servicer or follow the links below if you’re not sure. You can find contact information for your servicer from your billing statement.

More than half of U.S. mortgages come from Fannie Mae or Freddie Mac. These are mortgage programs with financial backing from the Federal government.

Fannie Mae: Look up whether your mortgage is owned by Fannie Mae
(800) 232-6643

Freddie Mac: Look up whether your mortgage is owned by Freddie Mac
(800) 373-3343

Mortgages can come from a variety of other government programs. The U.S. Department of Housing and Urban Development (HUD) is a provider for FHA mortgages. The U.S. Department of Agriculture is a provider for USDA-oriented mortgages. Even the U.S. Department of Veterans Affairs offers VA mortgages to veterans and their families. These programs may be eligible for relief under the CARES Act.

Contact your servicer regardless of mortgage type

Tell them your situation and ask what options are available to you. Even if your mortgage doesn’t have Federal backing, you may still qualify for other help.

If you’re considering a forbearance, keep in mind that it is not loan forgiveness. Ask your servicer what happens after the forbearance ends. Your servicer should be able to tell you if it will extend the loan term as a result. This allows you can make late payments later if your monthly payments go up to make up the difference. As a result, the entire amount will require payment in a lump sum. Additionally, see how forbearance could affect your credit.

Contact an approved counselor for advice

HUD has a list of approved housing counseling agencies in your state who can help explain your options. Consider contacting the Homeownership Preservation Foundation (HPF) at (888) 995-HOPE (995-4673). HPF, a nonprofit organization partnering with mortgage companies, local governments, and other organizations, helps consumers get loan modifications and prevent foreclosures.

Check what help is available where you live

Your state may offer additional support. Some states have frozen foreclosures. Find your state government’s website and look around for the latest updates on help for borrowers.

Scammers follow the headlines

It’s tempting to hire a company that promises changes to your loan and reduce monthly mortgage payments. Additionally, they could also offer other steps to save your home. Unfortunately, many companies use half-truths and outright lies to sell their services. Additionally, they could make promises but don’t deliver. Moreover, learn more about avoiding mortgage relief scams.

Don’t pay up-front for help

Federal law states that if you hire someone to help you with your mortgage, you pay no fee until they deliver the results you want. It’s illegal for a company to charge you until you’ve accepted their written loan modification offer. Additionally, this includes any other relief provided by your lender. However, you are also free to reject an offer you don’t like. You should always feel free to contact your mortgage servicer directly for additional options. Learn more about your rights when it comes to hiring a mortgage relief company.

This article by the FTC was distributed by the Personal Finance Syndication Network.