The coronavirus pandemic created financial chaos across the globe; America is on the verge of a massive financial bailout for consumers and industry to the tune of $2 trillion or more. States, lenders, and the federal government all have a keen interest in helping homeowners avoid financial crises, loan default, and foreclosure.
And now the mortgage industry has rallied to petition the White House for funds to assist homeowners.
On March 24, 2020, HousingWire.com ran a press release discussing a letter sent to the White House asking for mortgage relief for borrowers including delayed payments and interest.
The proposal includes the following benefits:
- A 90-day delayed payment option for mortgage payments;
- A proposed one-year loan forbearance period;
- Payment forbearance protections such as no negative credit reporting or collections;
- Introducing reduced documentation requirements.
All of this sounds great to many consumers, but what good is a letter sent to Washington D.C.?
In this particular case, it has a lot to do with who has signed that letter. The signatures for this consumer bailout program include:
- Mortgage Bankers Association
- American Bankers Association
- Consumer Data Industry Association,
- Structured Finance Association
- National Mortgage Servicing Association
- US Mortgage Insurers
One important detail to point out in the proposed stimulus for mortgage loan payments–this plan does NOT forgive the delayed payments outright (at least not under the version of the plan available at press time) but rather delays them to the end of the loan term. You are not skipping payments under this plan, but putting them off until much later.
At the time of this writing, the plan is ONLY a request for action and not an approved and scheduled done deal.
You may read about many different kinds of loan relief options offered to consumers but if you have not discussed your loan with your loan servicer, you are NOT subject to any loan relief measures that might be available.
In other words, no mortgage relief program is automatic–they ALL must be applied for and require the cooperation and participation of your loan servicer.
Borrowers should assume they must continue making payments on their mortgages UNLESS they have contacted their loan servicer directly to discuss options that may include loan forbearance, modification, or other possibilities.
Borrowers who do not know who to contact should start by reviewing their mortgage loan agreements to find contact phone numbers and other important information.
Remember, you must work with your lender before you start missing payments if you are in trouble on your loan and need loan modification or forbearance.