Biden extends safety to owners. What you have to know
Historic row houses in the Colombia Heights neighborhood of Washington DC, USA
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Homeowners struggling under the coronavirus pandemic received some welcome news Tuesday. The Biden government announced that it will extend its anti-forbearance and foreclosure programs.
The White House said the move will benefit the 2.7 million homeowners currently in Covid and expand the availability of forbearance options on around 11 million other government-supported mortgages across the country.
“Since the crisis is going on much longer than expected, it is only appropriate to expand what we know of,” said Sarah Gerecke, associate professor of planning at New York University. Many of these support options should expire next month.
Do you have any questions about the new protective measures? Here are some answers.
Does my mortgage qualify for the new protection?
Federal government-covered mortgages or approximately 70% of borrowers are eligible for Additional Forbearance.
If you have such a home loan, you can sign up for an forbearance until June 30th and possibly six months after that. If you have a Fannie Mae or Freddie Mac mortgage, you can delay your payments for at least another three months.
“The easiest way to find out if you are eligible and to apply for payment facilities if you need to, is to contact your lender,” said Greg McBride, financial analyst at Bankrate.com.
How do I beg your forbearance?
Do I need to provide evidence that I qualify for Forbearance?
McBride said the high paperwork requirements kept many homeowners from getting relief during the 2008 crisis.
Fortunately, during the pandemic, all you need to do is confirm that you have suffered financial hardship.
Do I have to do something if I am already in Forbearance?
Yes. Your forbearance is not automatically renewed.
“You have to contact your lender and ask about it,” said McBride.
How long can I be indulgent?
Some people will be indulgent for up to 18 months as the first stimulus package, which was passed in March, the CARES bill gave homeowners two 180-day relief periods, and now the Biden government gives them two additional three-month breaks.
How will my missed payments be calculated?
Fortunately, if you qualify for Forbearance, you won’t have to make a flat-rate payment of your payments at the end of the discharge period. (However, if you’re in the 30% of homeowners who don’t have a government-secured or guaranteed mortgage, you could.)
Instead, you can request that your payments be pinned to the end of your loan, McBride said.
For example, if you missed payments for 12 months, it will now take 31 years to repay a 30 year mortgage.
What if I’m at risk of foreclosure?
You should be safe at least until the end of June.
“”You will not be excluded during the duration of the moratorium unless you have vacated or left your property, “said Rob Van Raaphorst, vice president of communications for the Mortgage Bankers Association.