DENVER — As of early may, more than 3.8 million homeowners are in forbearance, representing 7.3% of all active mortgages, according to data from Black Knight Inc., which provides integrated technology, services, data and analytics to the mortgage and real estate industries.
Senior Reporter Mark Koebrich has more help for you and your money today, specifically your mortgage money. The key message for mortgage holders is that you need to call the people who are servicing your loan to discover what options you might have.
Reach out to your lender or loan servicer. Check your mortgage papers for contact information. Getting someone on the phone at this moment will be challenging, as the people you need to talk with are already experiencing high call volume, and staffs may have been impacted by coronavirus-related work place restrictions.
This blog from the Consumer Financial Protection Bureau gives you some questions to help you get the information you need:
- What are the major mortgage relief options?
- Which mortgage relief options do I qualify for?
- How do I get mortgage relief?
- What do I do once once I am receiving mortgage relief?
- How do I repay my forbearance?
- How do I watch out for scams?
- Does my utility offer protection from disconnection?
- Do renters have protection?
- Where can I get get more help?
If you have a "federally backed" mortgage — a mortgage issued by the VA, FHA, Fannie Mae, or Freddie Mac for example — you already have protections built in. Other agencies issue federally backed mortgages as well.
The Consumer Financial Protection Bureau has a list of those agencies and entities, with links to the guidance that they are currently providing as well as available "loan look-up" information.
- U.S. Department of Housing and Urban Development (HUD)
- U. S. Department of Agriculture
- USDA Direct
- USDA Guaranteed
- Federal Housing Administration (FHA) (Includes reverse mortgages)
- U.S. Department of Veterans Affairs (VA)
- Fannie Mae
- Check here to see if your loan is backed by Fannie Mae or call 1-800-232-6643 and press “4” for homeowner
- Freddie Mac
- Check here to see if your loan is backed by Freddie Mac or call 1-800-373-3343 and press “4” for homeowner.
You can also call the HUD National Servicing Center at 877-622-8525
Your lender can't foreclose on you if you are in trouble until May 18. That's the end of a 60-day moratorium. And even then, you have a right to request a "forbearance" (or suspension of payments) for up to 180 days, and an extension beyond that for another 180-days. So you essentially can get a year off from making payments.
There will be no additional fees, penalties or additional interest rates added to your account.
You are still required to pay any payments you've missed, but not until you are in better financial shape. But this is not automatic, you must call your lender to work out the details.
And if you don't have a federally backed mortgage, if you have a conventional loan, you may still have relief options through that lender, although that's a tougher road.
If that fails, Banker Michael Van Norstrand with the Independent Bankers of Colorado said you could attempt to "refinance" with either your current company, or though a "community" bank, a smaller local bank that may give you better terms.
"Depending on your balance sheet, your employment situation, those kinds of things, I think a community bank is going to be more nimble, more accepting to your situation, because they don't have to fit your underwriting criteria in a box," Norstrand said.
The smaller bank needs and wants your business, so they can be more accommodating — and interest rates right now are very low.
The key is to call some of those banks and do some research. Below is a website with some 25 banks belonging to the Colorado Mortgage Lenders Association. You might want to try your own bank for new terms first.
And what happens if you can't find a lender that will help you?
Colorado still has a tight housing supply and a growing population. A lot of people have seen a huge run-up in the value of their homes. So you could "sell" to improve your cash position. You will first need to find a place to go. You'll have to make some concessions, but in this difficult economy, it's is all about creating options for yourself.
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