COVID-19 Mortgage Assistance
As COVID-19 exerts a significant drag on the economy, there is a growing trend of governmental action to provide temporary protections of possession and tenancies at the national, state and local level. The government actions vary in form, duration and scope, but will generally delay the course of foreclosure or eviction.
The sources of eviction and foreclosure moratoriums include various executive orders of federal agencies, governors, mayors, judges, and even de facto moratorium by county sheriff departments that cease to process service of summonses and notices. While the eviction limitations are generally characterized as a response to COVID-19 and related government closings, the orders issued tend to apply to any eviction in the first instance. At least one exception is California, where the executive order attempts to authorize local suspension of only evictions that are related to COVID-19
For many loans, servicers have to offer you forbearance options if you ask for help because your income has been affected by the COVID-19 emergency. Forbearance means your payments are not due until the end of the forbearance period. You still owe all your mortgage payments for that time, but they can’t charge you penalties or late fees. At the end of the forbearance period, you can apply for a loan modification to help you get caught up on your payments. But loan modifications are not guaranteed. There may also be other options to catch up on your payments. Talk to your servicer.
If you ask for help, servicers have to offer forbearance options for the following types of federally-backed loans:
HUD Reverse Mortgage
For example: Sarah was approved for a 3-month forbearance by her servicer, for April, May, and June 2020. Sarah kept losing income during this time because of COVID-19. She called her servicer at the end of June to extend her forbearance for another 3 months - July, August, and September 2020. If she keeps losing income because of COVID-19, she can keep applying for forbearance extensions for up to a total of 12 months.
Forbearance options for these kinds of mortgages are available from March 27 until December 31, 2020, or the end of the COVID-19 emergency, whichever comes first.
Private Bank Mortgages
If your mortgage is not a federally-backed mortgage like the ones listed above, it is owned by a private bank. If that is the case, your servicer does not have to offer forbearance options. But your servicer may voluntarily offer a forbearance or have other COVID-related options.
Federal Cares Act
On March 27, the Federal CARES Act was signed. This Act suspends foreclosures from March 18 – May 17, 2020, for the following types of federally-backed mortgages:
HUD Reverse Mortgage
If your mortgage is with one of these, your servicer cannot start a foreclosure, hold a foreclosure sale, or evict anyone from March 18 – May 17, 2020.
Keep Your Keys
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