By Dylan Deprey
While social distancing has worked to flatten the curve, it has also left people scrambling for work. For some, the bills and the mortgage payment have been on time for years, and in an instance they’re anxiously trying to pay what they can.
According to the recently passed CARES Act, lenders cannot start the foreclosure process on federally backed loans (FHA, HUD, USDA, VA, Fannie Mae and Freddie Mac) for at least 60 days, as of March 18.
Along with keeping foreclosures on hold, banks, credit unions and mortgage holding companies are offering several customer assistance programs to alleviate mortgage payments during the Covid-19 pandemic.
These options allow their borrowers to suspend mortgage payments for up to 180 days without facing fees, penalties or hits to their credit score.
The catch: It’s the borrower’s responsibility to reach out to their servicer to request a payment plan if one is being offered.
“It is important for people to understand that what is currently being offered is not loan forgiveness,” said Johanna Jimenez, Take Root Milwaukee Program Manager.
Take Root Milwaukee is a consortium of 50 community organizations, neighborhoods groups, housing counseling agencies, Realtors and lenders focused on homeownership in the City of Milwaukee. They have created a resource page for borrowers to get in touch with their servicers.
“With some mortgage relief programs, you may owe all of your skipped payments when the deferment period ends, while others add those payments to the end of the mortgage loan,” Jimenez said.
As relief options varied between lenders, Jimenez said borrowers should understand exactly what was being offered to them and to document when payments would renew.
Borrowers can adjust their monthly payments over the phone and through online and mobile banking. Servicers have been asking borrowers to start the process online, as higher call volumes are leading to longer-than usual wait times.
Those without Internet access can call Take Root Milwaukee at 414.921.4149 to request a callback with their servicer’s contact information.
Take Root Milwaukee also recommends borrowers to have monthly income and expense information ready to share with their lender, as it will help determine what type of arrangement they qualify for.
For those that are able to continue making payments in full, are encouraged to do so and do not need to take any action.
For more information visit: https://takerootmilwaukee.com/