Public Service Announcement: REGARDING YOUR MORTGAGE PAYMENTS AND COVID-19
As most of you know; Congress and the President recently passed new legislation that will help with the economic effects of the COVID 19 outbreak. I wanted to put this out to inform people as to what this legislation is likely to cover. Right now; if your mortgage is owned by Fannie Mae or Freddie Mac; and you are affected financially as a result of the COVID-19 outbreak; then you will be afforded a forbearance for several months. A forbearance is a “break”. You do not have to make payments for a specific time frame. If you qualify for the Covid-19 Forbearance you will not be charged late fees or have negative credit reporting for your missed payments.The key word is that you must state the hardship is due to the pandemic. This means that if you are behind or were behind BEFORE the outbreak you will likely NOT qualify for this program. You would only qualify for a typical loan modification. This Forbearance IS NOT A MORATORIUM FROM YOUR MORTGAGE PAYMENTS. If you are awarded the forbearance period you WILL BE DUE FOR THAT PERIOD IMMEDIATELY UPON COMPLETION OF THAT PERIOD. After the forbearance is over(hopefully the outbreak is over too) your mortgage payments will pick up at no cost to you; no fees added; and your credit score will not be affected.
This is how the program is supposed to work. However with all government programs they never work as is planned. Therefore you should only rely on this type of program if you really really have to; only if you have no other choice. You cannot rely on this program just so you can get a break. Most servicers(that service for Fannie or Freddie) are inept and incompetent. They often do not apply the program appropriately to homeowners.. Their customer service is horrible and many many people will slip through the cracks. Servicers consistently lose paperwork or give you the “runaround”. If this occurs you could be fighting the bank to avoid a foreclosure.
Stay tuned!!! Because this is a fluid situation and is changing every day. I suggest you always get quality representation if you feel you are getting the runaround. I hope you never need my help but if you do; please call me anytime.
Matthew T. Desrochers, Esq.