What if I cannot make my mortgage payment?

I have seen a lot of posts from my fellow mortgage peeps about this topic in relation to the impact from Covid-19. Good posts but I have been struggling a little with what "I" would push out. I mean let's face it, many of us are going to be impacted financially and there is that mortgage payment looming! As a person in the industry, I think it is my responsibility to give you any insight that I have on the FACTS and my professional opinion and advice. So, here goes! Please know, the facts are REAL, the opinion and advice is just that (and we all know what those can be worth - depending on who is giving them). I will let YOU be the judge of that! ??

FACTS about mortgage lates and foreclosures:

1. Mortgage lates can affect your ability to obtain mortgage financing in the future. How many are allowed vary depending on the product being used.
2. Foreclosure can result in waiting periods from 3 to 7 years depending on the type of product used. ANY foreclosure identified can disqualify you for many Jumbo loans: loans over the Conforming loan limit. Conforming loan limits for all but ONE county in Georgia and Alabama is $510,400.

 FACTS about the programs currently being offered to assist you if you have been impacted by Covid-19:

1. Fannie Mae, Freddie Mac and Ginnie Mae are ALL providing directives to the servicer of your mortgage (who you make your payment to) on what options can be made available to clients during COVID-19 related assistance requests.
2. The PRIMARY Option made available is a forbearance. A forbearance is a temporary suspension of the mortgage payment intended to allow the individual(s) time to manage their financial situation. Forbearance can be in place for up to 12 months, HOWEVER, each servicer will determine the forbearance time they will allow.
3. All the payments suspended during the forbearance will be DUE at the end of the term offered.  
4. Taxes and insurance payments are still YOUR responsibility during any forbearance period. 
5. Credit bureau reporting of past due payments of borrowers in a forbearance plan as a result of hardships attributable to this national emergency is suspended. 
6. Homeowners in a forbearance plan will not incur late fees
7. After forbearance, a servicer must work with the borrower on a permanent plan to help maintain or reduce monthly payment amounts as necessary, including a loan modification

  IF YOU ARE STRUGGING TO MAKE YOUR MORTGAGE PAYMENTS OR BELIEVE YOU MAY FALL BEHIND ON YOUR PAYMENTS SOON – DON’T WAIT – CONTACT YOUR LOAN SERVICER NOW!

Please NOTE: Loan servicers are currently OVERWHELMED with calls. Many of these calls are just people exploring the “what if’s”. If you can make your payment, please do. Let the servicers focus on the individuals that need help NOW!

NOT ALL LOANS WILL FALL UNDER THIS DIRECTIVE! This directive is only for Conforming, FHA, VA, and USDA loans. The type of loan you have is typically displayed on your mortgage statement. Regardless, the directive is the same on who to call if you are in trouble: Call your servicer (the company you make your payments to).

Now here is a little of my own input and advise: 

1. Make every effort possible to make your mortgage payment. The programs offered should be a last resort. 
2. This is a time when we CANNOT afford to just ignore what is in front of us. Here are a few things that I recommend you do to put you in a better position:

• Position yourself to save a little more: Make the minimum payments on your credit cards so that you can pack a little more away in savings – just in case your financial situation changes in the next few weeks/months.
• Already there? CALL your creditors! Hoping that it just goes away does not solve the problem. ALL creditors are aware of the current environment and MANY have options available for you. 
• See if your employer will allow you to exempt yourself from Federal Taxes for a month or so to help you build that cushion. (Careful with this! Remember: You still have to pay them eventually!)
• KNOW how to prioritize what payments need to be made. What is the most important for you to maintain? (Hopefully you are choosing your home and your primary transportation!) ??
• KNOW what your options are! Penalties on 401K withdrawals up to $100,000 will be waived for COVID-19 situations. PENALTIES, not the taxes owned. However additional provisions have been made: You can repay all or portion of the distribution within 3 years or you have up to 3 years to pay the taxes related to the withdrawal! Withdrawing from your 401K is not encouraged when the market is down but KNOW this is there. It might help you sleep a little easier at night!
• If you have the need: Make SURE you ask LOTS of questions during any conversation about a forbearance program if you are looking at that option! 

            Any fees involved?

          How do you make sure your taxes and insurance are covered?

             How far in advance of the end of your forbearance period should you contact them if additional assistance is needed?

              What information would need to be provided if that additional assistance is needed (so you can be prepared!)?

3.         LAST piece of advice: The ONLY entity that can provide you with the above relief in this mortgage crises is your servicer! We often see scams appear during these times. Please be wary of any “offers” you might receive. Scammers will go to GREAT lengths to make their offer seem legitimate! You have a question about an offer you received: Do not call the number on the offer. Call the number provided on your mortgage statement to discuss your options!  

I hope this helps you to understand some of the directives out there! Below are links to some of the resources used to provide you with the information listed above. Knowledge of your options is crucial AND WILL hopefully give you some information to help determine your best approach with any challenges. Please also make SURE you use any professional help available to you to help you make decisions: Financial planners, CPA's, etc.

As you explore the options, please continue to take care and be safe out there! We WILL get through this!

https://www.fanniemae.com/portal/media/corporate-news/2020/covid-homeowner-assistance-options-7000.html

https://myhome.freddiemac.com/own/getting-help-disaster.html

https://www.washingtonpost.com/business/2020/03/30/coronavirus-stimulus-cares-act/