BEHIND THE SCENE
During the 2020 COVID-19 pandemic, when so many were suffering financially, the federal government stepped in and provided mortgage relief to millions by passing the CARES Act. Essentially, the CARES Act allows homeowners to enter mortgage forbearance, temporarily pausing monthly payments. Today millions of homeowners have left forbearance and are stable once more. However, many are still actively in forbearance. If you, a friend or family member are in this situation, here are a few things to consider in anticipation of your forbearance period ending.
Moves you can make now before your mortgage forbearance period ends.
First, you should be aware that under the provisions of the CARES Act, you won’t have to repay your excused monthly mortgage payments in a lump sum. Instead forbearance repayment can be made in one of the following ways. (Check with your loan servicer for details on your particular home loan.)
•Borrowers can repay past due mortgage payments within 6 - 12 months of the forbearance period ending. Six months for federally backed mortgage loans. Twelve for Fannie Mae or Freddie Mac loans.
•Or the mortgage term may be extended and excused payments included on the backend of the borrower’s mortgage.
•Or the mortgage term can be extended to 30 years and recalculated. (40 for Fannie Mae and Freddie Mac loans) Note in some cases the recalculated mortgage payment will be the same as or lower than it was before mortgage forbearance.
If you are still suffering from financial hardships caused by the pandemic, you may be able to extend your current mortgage forbearance period. You will need to contact your mortgage lender to find out if you are eligible. They will guide you and possibly suggest other options such as refinancing your loan to lower monthly payments. With interest rates still low this is a viable alternative for some homeowners.
Whatever you do, please remember it is best to seek advice from your lender well in advance of your forbearance period ending so you can explore the solution that is right for your situation. If you start getting foreclosure letters, take this very seriously. Losing your home in Texas can happen quicker than you think. This would be the time to consider legal advice and possibly contact a realtor if you are forced to sell your home.
Hi, I’m Suzanne Athey, owner and founder of Team Athey & Remarkable Property Management. I hope you found our blog helpful to you as a homeowner. If you’d like to know more, call me at 469-916-1222, or email me at suzanne@teamathey.com. I’d love to visit with you and answer all your real estate questions.
