COVID-19 is wreaking havoc across the nation, with 2,850,000 people losing their jobs from February to March and another 2,281,000 with a job and not working according to a report from the US Bureau of Labor Statistics from April 3. Many of these people own homes, you may be one of them. Does the CARES Act impact me as a homeowner? Read on!
The first and most important question you must ask is “Who owns my loan?”. You may work with a local bank down the road, but many of these banks and mortgage brokers sell the loan to a government agency or private lender. If the government owns your loan, that is great news! The CARES Act does impact you as a homeowner.
Who are the federal loan agencies who may own your loan? Well, there are a bunch.
- Fannie Mae
- Freddie Mac
- FHA (Federal Housing Administration)
- HUD (Department of Housing and Urban Development
- VA (Department of Veterans Affairs)
- Department of Agriculture
The best way to find out if one of these organizations owns your loan is to just call your loan broker.
Why is this great news?
If COVID-19 is the reason you are not working, you can get forbearance (skip payments now and make them up at the end of the loan) for up to 180 days. If you still are in trouble after that, you can request up to another 180.
Additionally, federally backed loans can not be foreclosed upon for at least 60 days (but the clock started March 18). I will keep you up to date on any new information as it comes out!
“That’s great Travis, but my loan is privately held. What are my options?”
If you still aren’t sure if the CARES Act impacts you as a homeowner because you have a private loan, you must speak with your lender. There is a good chance you still could get forbearance. Many lenders are offering 90 day forbearance periods, however the terms are different and you must be careful! Some lenders will make all of the skipped payments due at the end of the 90 day period, which could be very difficult to pay. You will have to make sure you understand the terms to avoid coming out in a worse situation. Even with the payments due at the end of the period, you may be able to work out a solution to refinance the loan to get more manageable payments. Most lenders should be flexible in these unique times.
One last word of warning – You usually have to ASK your mortgage company for relief. They will not do it for you just to be nice. They also have very high call volume right now, so be patient!
As always, we are happy to chat with you about any way we can help. Just go to the contact page and fill out the form!
*Disclaimer – I am not an attorney and the information provided on this site is not legal advice, it is meant to educate you. Please consult an attorney or your mortgage holder for more detailed information.