The COVID-19 pandemic brought unprecedented challenges in many aspects of life, including finances.
According to the Consumer Financial Protection Bureau (CFPB), roughly 7.7 million households received a forbearance during the COVID-19 pandemic, enabling them to pause or reduce mortgage payments to stay in their homes.
“Millions of homeowners have been negatively impacted by the pandemic, but there are steps you can take to seek assistance,” said CFPB Director Rohit Chopra. “If you are having a hard time making mortgage payments or facing foreclosure, you may have relief options depending on the type of mortgage you have. There is still time to act if help is needed, but you must act soon.”
The majority have already resumed their regular mortgage payments, and the nation has averted a repeat of the housing crisis it endured during the Great Recession.The following are tips provided by the CFPB to help homeowners manage missed mortgage payments.
Homeowners who entered into mortgage forbearance because of financial hardship related to COVID-19 may have options for repaying their missed payments.
- A payment deferral or partial claim allows you to wait to make up unpaid balances until the end of your loan or when you sell or refinance your home.
- A loan modification allows you to change loan terms that might lower your monthly payments or extend the length of your loan.
- A lump sum repayment means you pay the total amount of skipped payments to your mortgage servicer.
- Repayment plans add the amount you missed to your regular mortgage payments.
Not all options are available to everyone, and will vary based on your loan, servicer, and financial situation.
Generally, you won’t have to repay missed mortgage payments in a lump sum.
In most cases your mortgage servicer cannot require you to pay back your missed payments as a lump sum repayment if your mortgage is federally backed. This includes Fannie Mae, Freddie Mac, FHA, VA or USDA loans,. Many other mortgages do not require a lump sum repayment. If you only hear about a lump sum repayment, ask about other options.
Make a plan today.
Members of the public are asked to contact a HUD-approved counseling agency in your area for help talking with your mortgage servicer, understanding available options, or concerns regarding options.
The CFPB has information on to help Individuals who have difficulties making mortgage payments due to the COVID-19 related hardship. Further information can be found on the CFPB webpage.