The coronavirus emergency has created difficult financial times for most Americans. Many wonder where they will find the money to meet their financial obligations including mortgage payments.
Those who have FHA home loans should contact their loan servicers right away due to the latest round of coronavirus relief measures aimed at helping FHA borrowers save their homes from loan default and eventual foreclosure.
The Department of Housing and Urban Development has provided a new coronavirus mortgage relief package for FHA borrowers above and beyond the original 60-day foreclosure moratorium issued previously.
If you have an FHA mortgage, refinance loan, or One-Time Close Construction mortgage and are experiencing financial hardship as a result of the COVID-19 outbreak, you may qualify for certain relief measures that took effect April 1, 2020.
Borrowers with a financial hardship that makes them unable to pay their mortgage due to the COVID-19 National Emergency should contact their loan servicers.
This is so you can discuss your loan forbearance options–according to the HUD officials site, “…mortgage servicers must extend deferred or reduced mortgage payment options – called forbearance – for up to six months, and must provide an additional six months of forbearance if requested by the borrower.”
The last line in that statement is crucial “…if requested by the borrower.” You must contact your lender or loan servicer to arrange for loan forbearance, modification, or other alterations. The lender must participate.
Consider this a warning not to skip FHA mortgage payments or assume your payments are suspended, delayed, or otherwise modified unless you have spoken to someone at your financial institution about your legally binding loan contract.
The document you signed obligates you to make your mortgage payments unless you and the lender make other arrangements together.
The FHA and HUD have also announced the COVID-19 National Emergency Partial Claim, which may be used with the previously mentioned COVID-19 FHA Loan Forbearance period comes to an end.
A “partial claim” helps qualifying borrowers who were authorized COVID-19 National Emergency loan forbearance to “reinstate their loans by authorizing servicers to advance funds on behalf of homeowners” according to the HUD press release.
A partial claim delays the repayment of those advances “through an interest-free subordinate mortgage that the borrower does not have to pay off until their first mortgage is paid off”.
Contact your loan servicer at the first indication you may have difficulty making mortgage payments. The longer you wait, the fewer your options for saving the home are.
Contact your loan servicer to ask about these options and don’t hesitate to contact the FHA directly for further clarification at their toll-free number: 1-800 CALL FHA.