As the economic effects of the COVID-19 pandemic sharpen into focus; Banks are offering some mortgage relief to homeowners.
Mortgage Relief by Fannie Mae and Freddie Mac
On March 18, 2020, the Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to suspend foreclosures and evictions for at least 60 days while the nation addresses the coronavirus emergency. FHFA Press Release. This covers about half of the mortgages in the county.
In addition to the 60 suspensions of foreclosures and evictions, homeowners whose mortgages are owned by Fannie Mae or Freddie Mac may be eligible for COVID-19 relief, including:
- Mortgage Forbearance for up to 12 months. This means a homeowner may be able to not make payments on the mortgage without foreclosure. Interest will still accrue on the loan.
- Waiver of Late Fees and Penalties.
- Suspending reporting to credit bureaus of delinquency related to Forbearance.
- Loan modification programs to lower monthly payments or keep payments the same before entering Forbearance.
A Mortgage Checklist During the COVID-19 Emergency
For those whose mortgages are not owned by Fannie Mae or Freddie Mac, relief may still be available. Some banks are offering assistance due to the COVID-19 pandemic. Here is a checklist for how to manage your mortgage during the COVID-19 emergency:
- Talk to your mortgage servicer or lender. The most important thing a homeowner can do it to reach out to your mortgage servicer or lender. Some of the assistance programs require that you were current on your mortgage payments prior to the COVID-19 emergency declaration.
- Document when you suffered hardship from COVID-19.
- Be prepared to pay back what you owe. Forbearance programs require that a homeowner pay back the amount owed after the forbearance ends. Sometimes this means that you will need to pay additional amounts on your monthly payment. There are options that allow you to keep your new, lower payment in return for a longer payback period.
Even if your mortgage isn’t owned by Fannie Mae or Freddie Mac, relief may be available. It is crucial that you contact your mortgage servicer right away.
Mortgage Tips for Landlords
If you are a Landlord that has rental properties subject to a mortgage, it is also important that you contact your mortgage servicer and check in on your tenants. States and local governments are enacting COVID-19 relief to tenants, such as postponing current eviction matters and prohibiting evictions based on non-payment of rent. If your rental investment is leveraged, it is vital that you keep your mortgage servicer in the loop.
If you have questions regarding protecting your home, please feel free to contact the real estate team at Navigate Law Group. We have the resources and knowledge to help you with your legal matters while we all take preventive measures to stop the spread of coronavirus.
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Every legal issue is very unique. Accordingly, the information in this blog is intended as general education material and not as legal advice. If you think you may have a legal issue you should consult an attorney.