Q: I've been laid off due to Covid-19 and can't pay my mortgage ... what are my options?
A: With more than 30 million Americans losing jobs or businesses and others forced to take pay cuts, many are finding it increasingly difficult to make housing payments. The federal CARES Act signed into law on March 27, 2020, provides mortgage assistance and a foreclosure moratorium.
If you are experiencing a hardship such as job loss, income reduction, or sickness due to COVID-19 and you are no longer able to make your mortgage payment, your mortgage servicer is available to help with mortgage relief options, including: mortgage forbearance, late fee relief, repayment plan or loan modification.
Approximately 70% of all single-family mortgages in America are backed by the federal government and on April 23, 2020, approximately 3.5 million single-family mortgages were in forbearance. By May 1, 2020, Fannie Mae, alone, revealed that more than 1 million of its borrowers (approximately 7% of the mortgages in its portfolio) are already in forbearance, with projections that the number could double in the coming weeks.
Under the CARES Act, homeowners suffering any kind of financial hardship related to COVID-19 can get up to 12 months of forbearance. This means for 12 months you don't have to make your mortgage payment.
The immediate thing to do is to contact your mortgage servicer – this information can generally be found on your monthly mortgage statement. Have your financial information available when you call and note that many servicers are experiencing increased call volumes and hold times due to COVID-19.
Click on the following links for information regarding the moratorium on federally backed mortgage foreclosures and assistance programs:
Many lenders are automatically giving borrowers a three-month forbearance period, but under the CARES Act, you have a right to ask for up to 12 months, if you need it.
Federal regulators have been working to correct misinformation - most homeowners will get the payments moved to the back of their loan. They will not have to pay a lump sum. If you accept the forbearance and at the end of the period the lender requires a lump sum payment, you should contact a housing counselor, seek free legal services, file a complaint with the Consumer Financial Protection Bureau or your state attorney general.
