March 20, 2020
Are you afraid of losing your home due to diminished income or a lack of income related to closures, furloughs, and layoffs due to coronavirus prevention?
The global pandemic caused by the coronavirus has created major financial problems and governments worldwide struggle to control the damage.
Mortgage rates have fluctuated wildly between incredible lows and one-year highs, the Fed has made emergency interest rate cuts, and hundreds of companies have been forced to endure waves of closures or reduced hours.
Affording your mortgage payment in times like these is difficult; it’s easy to fall behind on your financial obligations. Do you know what to do if you are in danger of being late or missing a mortgage payment on your FHA home loan?
Act Now To Avoid More Financial Damage
The moment you know your income will be reduced or otherwise affected by the coronavirus, contact your loan officer and talk about your options for home loan modification and other options that may be available depending on your circumstances.
But you must make these arrangements your lender BEFORE you miss a payment. Otherwise, you risk missing out on the best options for getting caught up.
The most options and the most flexible options are open to those who act quickly. The more payments you miss, the fewer and less flexible your options are.
If you don’t contact your lender but keep missing payments, it’s easy to see why the lender wouldn’t be inclined to work with you later in the game–miss one payment and you get the benefit of the doubt about your ability to manage the rest of your mortgage.
Miss FOUR payments without contacting your loan officer? Most consumers can do the math from here, so to speak, to understand why there aren’t better options at that stage.
Bottom line? If you miss too many payments, you may have no options other than eviction and foreclosure. Do not delay in contacting your lender.
The FHA Foreclosure Moratorium
There is an FHA-ordered 60-day foreclosure moratorium effective March 18, 2020. That moratorium expires 60 days from then (unless HUD extends it.)
This moratorium is applicable only for FHA mortgages and FHA reverse mortgages (FHA HECM loans). VA, USDA, and conventional mortgages are not affected by the FHA moratorium, but there may be similar steps taken for such loans depending on the program.
Foreclosure relief (from the lender) is NOT automatic and the moratorium does not include features that would help a borrower specifically avoid loan default and foreclosure. That is up to the borrower to contact the lender and make arrangements with the bank.
Call your loan officer and provide your mortgage information including the date of closing, the term of the loan, any reference number assigned to your file, your address, amount of your mortgage payment and the amount you have fallen behind in paying where applicable.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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