What to do when cannot make your mortgage payment
At Team Zotti, we are here to help our community navigate through this situation as your local real estate resource. Not long ago the word “foreclosure” dominated the headlines as millions of Americans were losing their homes during the Great Recession. Now, that dreadful word is reappearing in the media due to the COVID-19 pandemic’s effect on the economy. Most of what we hear is speculation because no one really knows what will happen, nor how long this situation will last.
Try to put the word “foreclosure” out of your mind for now. We have suggestions that can help if you find yourself in the situation of not being able to make your mortgage payments. “President Trump ordered foreclosures and evictions to cease for 60 days across the U.S. in response to the Coronavirus pandemic that has idled millions of workers.” That was the a relief for Americans to hear this as tens of thousands of Americans are lost their jobs over the recent weeks. At least initially, most people will have one less bill to stress over.
So what happens in the coming months? That answer depends on your current financial picture. If you were a saver, you should more options than those who live paycheck-to-paycheck.
First, Make That Call
The last thing anyone wants to do is call their mortgage company and tell them they can’t make the payment. It is always better to call and start exploring your options before you start missing payments. Many mortgage companies and banks are offering deferral programs during the COVID-19 crisis but what exactly does that mean? A loan deferral isn’t forgiveness and you’ll be expected to make up those missed payments at a later date. Very few homeowners will achieve cooperation with the banks and have their missed payments added onto the end of their loans. It is in your best interest to make the payments if you can. Don’t forget, the interest on the loan will most likely continue to accrue.
You will likely need to offer proof of your hardship. Lenders generally require payroll records and bank statements that show a declining income and a profit and loss statements from the self-employed.
So, what if your lender won’t work with you?
We have yet to hear of a lender who is refusing to at least listen to homeowners at this time but that can happen. If you have a conventional loan and your lender refuses to work with you, call a HUD-approved housing counselor at 800-569-4287.
Borrowers with FHA-backed loans can find help dealing with their lenders by calling the National Servicing Center at 877-622-8525. You will be asked to provide the names of all people listed on the mortgage and the full address of the property. If you have your loan settlement statement handy, take down the 13-digit FHA case number for faster service.
If you are a veteran with a VA loan, you can find help on the U.S. Department of Veterans Affairs website.
On a side note, if your lender will not work with you, or you prefer not to pursue their solutions, you might consider selling or refinancing to with the mortgage payments that you cannot afford at this time:
Option 1) Apply to refinance your mortgage
Option 2) Sell your home
Also, Avoid Any Foreclosure Scams
During the last recession, foreclosure prevention scams became a growing issue. While we haven’t seen any of those recently, if the crisis continues, they may show up again. Some of those scam companies chose names and phone numbers that were quite similar to legitimate government programs. They charged high up-front fees while promising to pay off the borrower’s delinquent mortgage, only to fail homeowners that are desperately trying to save their homes.
If you have any questions or need to review any offers you receive, call the HUD housing counselors (800-569-4287). We are here too. You reach out to us too so we connect with the right professional resources. We have the resources to give you experienced guidance. Contact us today at (661) 622-3476