Homeowners Hurt Financially By The Coronavirus May Get A Mortgage Break

[appalachiablue]

Source: NPR

Homeowners who have lost income or their jobs because of the coronavirus outbreak are getting some relief. Depending on their situation, they should be eligible to have their mortgage payments reduced or suspended for up to 12 months.

Federal regulators, through the mortgage giants Fannie Mae and Freddie Mac, are ordering lenders to offer homeowners flexibility. The move covers about half of all home loans in the U.S. — those guaranteed by Fannie and Freddie. But regulators expect that the entire mortgage industry will quickly adopt a similar policy.

Under the plan, people who have suffered a loss of income can qualify to make reduced payments or be granted a complete pause in payments. "That forbearance is up to 12 months, depending on their particular situation," says Mark Calabria, director of the Federal Housing Finance Agency, which oversees Fannie and Freddie.

Homeowners can't just stop paying their mortgage. "They need to contact their servicer — that is the lender that they send the check to every month," he says. "That lender will work with them to be able to work out a payment plan. Obviously, we hope to get them back on their feet as soon as possible."...


Read more: https://www.npr.org/2020/03/19/818343720/homeowners-hurt-financially-by-the-coronavirus-may-get-a-mortgage-break

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Calabria says people in financial distress because of the coronavirus can just verbally testify to that over the phone with their lender. Documenting the hardship can come later. "You're not going to have to send 20 pieces of paper at the front of this," he says. "We want to do it quickly."

This is not a debt forgiveness or free money program. Homeowners will work out a repayment plan once they recover financially. Calabria says that this might involve just extending the term of the loan, but it may vary by lender and each particular case.

[progree]

1. Yeah, I know all about this crap -- I helped a friend with mortgage relief

Last edited Thu Mar 19, 2020, 07:42 PM - Edit history (3)

under HARP a few years ago. And it is a TON of paperwork and then you get rejected anyway because of some stupid ass rule. In this case the rule was that they don't count rental income from housemate renters, so her remaining income was insufficient to meet their guidelines -- in other words they figured even with the maximum relief they could offer under HARP guidelines, they figured she was going to go under anyway so it would be money down the drain. And I'd agree with that if she had no rental income. But she did and does, for years.

Well I had done a ton of research on the guidelines, but had interpreted them that they would count 80% of renter's income. So all the tons and tons of time we spent getting a statement of income and expenses together that would past muster was wasted, and had I known they would not count any of her rental income, I would not have bothered because I knew their "Net Present Value" guideline (IIRC that the total housing cost must be less than 30% of total income), and with not counting rental income, she was nowhere near to meeting that 30% threshold. And it was many tens of hours we both spent on this.

So I wouldn't be gurgling in metaphysical ecstasy over this.

[ret5hd]

2. Oh, just wait for the repossessions to start. Just another way for...

wealth to return to its "rightful owners".

[Wellstone ruled]

3. By this time in June.

[iluvtennis]

4. And it's what trump as "real estate" business person wants. Buy up the real estate on the low. nt

[fleur-de-lisa]

5. I'm sure there's a scam in there somewhere that will hurt homeowners.

We just haven’t figured out the details of the GOP treachery yet.