What to do if you can’t make your mortgage payments

Kimberly Bean
Published on April 6, 2020

What to do if you can’t make your mortgage payments

If it feels a little like deja vu, you’re not alone. It wasn’t that long ago at that the word “foreclosure” dominated the headlines as millions of Americans lost their homes during the Great Recession.

Now, that dreaded “F” word is appearing again in news reports of the COVID-19 pandemic’s effect on the economy. Yes, they’re speculating. Nobody really knows what will happen or how long this will last.

But for homeowners in Southern Maryland and across the country, all it takes is the prospect of missing one mortgage payment to bring back all those dreadful memories from years ago.

Put “foreclosure” to the back of your mind. We have some suggestions to help you deal with the prospect of being unable to make your mortgage payments.

You’re safe for now

“President Trump on Saturday ordered foreclosures and evictions to cease for 60 days across the U.S. in response to the coronavirus pandemic that has idled millions of workers.”

That’s good news for the tens of thousands of Americans and Southern Marylanders who have lost their jobs over the past few weeks. At least for one month, they will have one less bill to worry about.

But what happens next month? A lot depends on your current financial picture. If you’re a saver, you have far more options than those who live paycheck-to-paycheck.

That first call

It’s scary  to think about calling your mortgage company to tell them you can’t make your payment. But, call you must, and afterward, you’ll be glad you did.

Many mortgage companies and banks are offering deferral programs during the COVID-19 crisis.

Remember that a deferral isn’t forgiveness, and you’ll be expected to make up the missed payments at a later date (unless you can convince them to tack the missed payments onto the end of the loan).

As well, the interest on the loan will likely continue to accrue.

You will probably need to offer proof of your hardship, and many lenders require pay stubs and bank statements (to show a declining income) and a profit and loss statement from the self-employed.

What if my lender won’t work with me?

We have yet to hear of a lender who is refusing to at least listen to homeowners at this time. This doesn’t mean they don’t exist. If you have a conventional loan and the lender refuses to work with you, call a HUD-approved housing counselor at 800-569-4287.

Borrowers with FHA-backed loans will find help dealing with their lender by calling the National Servicing Center at 877-622-8525. You will be asked to provide the names of all people listed on the mortgage and the full address of the property. If you have your loan settlement statement handy, jot down the 13-digit FHA case number. This may get you faster service.

VA borrowers can find help on the U.S. Department of Veterans Affairs website.

Additional solutions

If your lender won’t work with you, or you prefer not to pursue the aforementioned solutions, consider the following ways of dealing with mortgage payments that you cannot afford at this time:

  • Sell the home
  • Apply to refinance your mortgage

Avoid foreclosure prevention scams

During the Great Recession, foreclosure prevention scams became a cottage industry. While we haven’t seen any recently, if the crisis continues, they may pop up again.

Many of these scam companies chose names and phone numbers that were quite similar to those of government programs. They charged high up-front fees while promising to pay off the borrower’s delinquent mortgage.

If you have any questions or suspicions about offers you receive, call a HUD housing counselor (800-569-4287) or reach out to us and we’ll point you in the right direction.

Waldorf MD Homes for Sale and Real Estate Services in Southern Maryland. You now have a search engine to help you with your Southern Maryland home search! And I’m ready to provide you with a custom home valuation if you’re considering selling your home. Let’s connect to discuss how I can help you. Contact Kimberly Bean at 301-440-1309

Powered by WPeMatico

Contact Us!

chat_bubble
X