By Joan Reading
President, Credit Counseling Center
If you’re among those financially impacted by the coronavirus pandemic, you might be concerned about how to pay your mortgage. If you can’t pay your mortgage, contact your mortgage servicer immediately. It may take a while to get a loan servicer on the phone, so be patient.
About the Two CARES Act Protections
The new federal law, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, puts in place two protections for homeowners with federally backed mortgages:
- A foreclosure moratorium
- A right to forbearance for homeowners who are experiencing a financial hardship due to the COVID-19 emergency.
If you don’t have a federally backed mortgage, you still may have relief options through your mortgage servicer.
Mortgage forbearance
Forbearance is when your mortgage servicer or lender allows you to pause or reduce your mortgage payments for a limited period of time. Forbearance doesn’t erase what you owe – you’ll have to repay any missed or reduced payments in the future. With some forbearance programs, you may owe all of your missed payments at one time. Your mortgage relief options depend on who owns or backs your mortgage.
First, figure out who services your mortgage. This is who you need to contact.
Your mortgage servicer is the company that you send your mortgage payments to each month. If you don’t know or can’t remember who currently services your mortgage, look at your mortgage statement for contact information.
Second, figure out if your mortgage is federally backed.
To be eligible for protections under the CARES Act your mortgage must be federally owned or otherwise backed by one of the federal agencies.
Get it in writing.
Once you’re able to secure forbearance or another mortgage relief option, ask your servicer to provide written documentation that confirms the details of your agreement and that you’re clear on what the terms are. With some forbearance programs, you may owe all of your missed payments at one time, or additional payments at the end of the mortgage might be required, so make sure you’re familiar with the final terms.
For more information about the CARES Act go to www.consumerfinance.gov. For insight and guidance on any mortgage modification call the non-profit Credit Counseling Center. Let the professionals help you understand how to save your home – call 215 348-8003 or visit ccc-credit.com.