What is common during a crisis is that most of us know the start time, but cannot say for sure when it will end. Most end dates are only speculations and predictions, which may be from a careful analysis of a similar event or trend in the past. The same goes for the COVID-19 pandemic that started this year. Several people are contracting the virus every day; while some are recovering, others are dying. Several people have lost their loved ones and even their jobs to the pandemic.
Due to this, most borrowers are seriously struggling to keep up with their mortgage payments. Some have defaulted, and it is beginning to affect their credit score, while others are thinking of stopping the payment but do not know how to go about it.
If you fall into any of these categories, then the truth is that the federal and state government and private lenders to help during this period are implementing several options. Hence, instead of suspending your mortgage payment, you can begin to consider these options, but you need to make sure that you keep the line of communication between you as a borrower and your lender open. Some lenders allow forbearance and other implementations at this time, but you might not know unless you reach out to them.
GOVERNMENT-INSURED MORTGAGE LOANS
Loans are made available by the federal government during this period to help people survive the pandemic. For instance, if you have a Fannie Mae or Freddie Mac loan, you can apply for a loan in the Federal Housing Authority (FHA), the U.S. Department of Veterans Affairs (VA) and the U.S. Department of Agriculture. These are government-insured loans, and they can come in handy during this period.
The CARES Act has also been created to help with mortgage relief protection for those having a government-backed loan and are struggling during this period.
WELLS FARGO: Wells Fargo is offering a payment suspension for three months or more during this period. It also states on their website that late payment during this period will not be reported to the credit bureau and, as such, will not affect the borrower’s credit score. Loan modification implementation is also in place to help borrowers pay back with ease once the pandemic is over.
BANK OF AMERICA
Bank of America has also allowed a loan payment suspension for up to three months and more, using two different payment methods: payment deferral and payment forbearance. A borrower, depending on several factors considered by them, can use either of these two. Also, late or missed payments will not be reported to the credit bureau so that debtors can keep a good credit score during this period.
Quicken Loans is also offering a similar package as the two lenders above, allowing a forbearance of up to three months. It will not affect the borrower’s credit score, and no late fee will be charged on differed or defaulted payment.
Borrowers can make use of these options instead of suspending their mortgage payment. Ensure you reach out to your lender while considering any of these loan options.