What you need to know if you have suspended mortgage payments during a pandemic



A. First, find out when your period of abstinence will expire. Abstinence is the legal term for a lender-approved suspension of your mortgage payments. According to the Consumer Financial Protection Bureau, about 3 million homeowners currently have defaulted mortgages, but about 2 million of them have patience. Abstinence gives them temporary protection against foreclosures, loan ruin, and late fees while they miss payments.

But patience doesn’t last forever.

Q. What are the rules governing the expiration of abstinence?

A. The federal government set rules when it took proactive action to protect homeowners in the weeks following the first strike of the coronavirus pandemic. The $ 2.2 trillion CARES Act was signed in late March 2020; among many other provisions, it gave homeowners with federal loans the right to request and receive a grace period of up to 180 days.

It also gave homeowners the right to demand an extension of up to 180 additional days, for a total of about one year of suspended payments. A lot of homeowners got approval last summer, which means their abstinence period could end in the next few months.

Q. What if I am still going through the financial crisis?

A. The government later amended the program to give homeowners up to two additional three-month extensions with a maximum grace period of 18 months. If you think you need an extension, now is the time to act.

Q. Where can I go for an extension?

A. Your mortgage attendants, which can be your lender or someone hired by your lender to administer your mortgage. The most important tip is to contact your mortgage agent. Before calling, go to the customer service website and look for “condescension” and “COVID-19”. My lender’s website says, “Let us know as soon as you can. [if you can’t make your payment]… There are often options that can be extended depending on your situation and the credit you have. “

These are unusual times. Your service staff understands this. Open a dialogue.

Contact us by email or phone. There may be delays with you, so it is best to contact you well before your tolerance expires.

Q. Am I guaranteed an extension?

A. It depends on what kind of mortgage you have. About 70 percent of mortgages are backed by the federal government, which means that the federal corporation or agency owns or guarantees them. There are two categories of federally guaranteed mortgages, each with different rules.

Q. What are the rules for each category?

A. Generally, the rules are stricter for HUD / FHA, USDA and VA backed mortgages than Fannie Mae or Freddie Mac backed mortgages. For example, Fannie Mae and Freddie Mac usually grant extensions, while HUD / FHA, USDA, and VA require a qualifying process. Contact your service personnel for details.

Q. Are there other rules for applying for an extension?

A. Yes, for Fannie Mae or Freddie Mac mortgages, you must have an active abstinence plan as of February 28, 2021. For HUD / FHA, USDA and VA mortgages, you must request an initial abstinence plan no later than June. 30, 2020.

Q. What if I never asked for leniency. May I request this now?

A. If your loan is secured by Fannie Mae or Freddie Mac, there is no deadline for filing an initial grace period. But if your loan is secured by HUD / FHA, USDA, or VA, the deadline for requesting an initial grace period is June 30th.

Q. How do I know if my mortgage is federally backed?

BUT. Search the Internet for Fannie Mae and lookup, Freddie Mac and lookup to find websites that will allow you to enter certain information to see if your mortgage is supported by any agency. Or ask your lender or mortgage agent.

Q. What if my mortgage is not federally backed?

A. Many banks have their own mortgage suspension programs, most of which are similar to the CARES Act. Check out their websites. Talk to your service staff.

Q. What happens when my abstinence period ends?

A. Patience does not mean that your missed payments will be canceled, forgiven or canceled. You must offer a plan to compensate for missed payments. The CARES Act does not provide guidance on how to do this. It’s up to you to negotiate an agreement.

Q. What are the payback alternatives?

A. The least burdensome may be to extend the term of the mortgage. If you miss 12 payments, the mortgage term will be extended by one year so that you can make these payments.

You can also agree to double your payments over the next six months to offset the missed annual payments, although this may be too much of a burden for most.

Q. Other alternatives?

A. You can negotiate with your lender to rewrite your mortgage, including the interest rate and length of the loan, adding the missed payments to the new borrowed amount – basically refinancing.

An alternative that you probably want to avoid is air payment, where you pay all missed payments in a lump sum.

Q. What about my escrow account?

A. Many borrowers include additional money in their monthly mortgage payments to cover property taxes. Check with your city or town to make sure you are up to date.

There is a problem? Send your consumer question to sean.murphy@globe.com… Follow him on Twitter @spmurphyboston


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