We are getting bombarded with people asking us how to handle their mortgage during COVID-19. With the new stimulus bill that was passed, there is a lot of misinformation being circulated right now.
Here is the main piece of information that you should know about your mortgage:
If you need to delay your current mortgage payment, you MUST contact your mortgage company that is servicing your loan. It will NOT automatically defer.
If your loan is owned by Fannie Mae or Freddie Mac:
Then you MAY be eligible in delaying your mortgage payment. If eligible and your loan is owned (not serviced) by Fannie Mae or Freddie Mac – then you can delay payment(s) for a temporary amount of time and you will not incur late fees, you will not have delinquencies reported to the credit bureaus, and foreclosures will be suspended. Again, you MUST REACH OUT TO YOUR LOAN SERVICER.
To see if Freddie Mac owns your loan: https://ww3.freddiemac.com/loanlookup/
To see if Fannie Mae owns your loan: https://www.knowyouroptions.com/loanlookup
What about a mortgage forbearance?
This is only a temporary postponement of your mortgage payments. You will be required to make up these missed payments.
Some companies will give you a 3-month forbearance, but then you have to pay it all in full at the end of the 3 months. Other companies will move the payments to the end of your mortgage schedule.
Please make sure you get everything in writing and review it all before agreeing to anything.
PRO TIP: Find out if they are waiving late fees and not reporting to credit bureaus for late payments. Be sure you know the exact date you owe your next payment.
What about a loan modification?
Loan modifications change the terms of your loan.
WE STRONGLY ADVISE AGAINST THIS.
Many people do not find out that they do not qualify for a loan modification until months down the line. At that point, they have missed many payments and your mortgage company can begin foreclosure proceedings. Doing this can also ruin your credit score for missed and late payments.
If a third party is offering this and not your loan servicer, RUN. HANG UP THE PHONE. DO NOT PASS GO.
Can I be foreclosed on?
There is a national moratorium on foreclosures if your loan is owned by Fannie Mae, Freddie Mac, or backed by the Federal Housing Administration (aka FHA loan).
This includes foreclosures that have already started.
How do you handle your mortgage during COVID-19: we cannot impress upon everyone enough that you must continue to pay your mortgage.
Unless you have made an agreement with your loan servicer, then you are obligated to make a payment.
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