COVID-19 Update: Is Homeowner Relief for Mortgages Coming?
But such efforts are not nationwide and they do NOT affect ALL borrowers. If you have not spoken to your loan servicer, you do not have the ability to delay or suspend payments. Any alteration to your loan must be done with the agreement and participation of your loan servicer.
But some of the major mortgage industry names have banded together to request financial relief from the federal government. That relief would include suspended mortgage payments and associated interest charges.
On March 24, 2020, a press release issued on HousingWire.com announced the mortgage industry’s “biggest trade and lobbying groups” have requested “widespread relief for all borrowers affected by the coronavirus outbreak in the U.S.” A letter sent to the White House included a plan for doing so, signed by:
- Mortgage Bankers Association
- American Bankers Association
- Consumer Data Industry Association,
- Structured Finance Association
- National Mortgage Servicing Association
- US Mortgage Insurers
The proposal includes the following benefits:
- A 90-day break from their mortgage payments
- A proposed one-year loan forbearance period
- Payment forbearance protections such as no negative credit reporting or collections
This plan seeks to delay those payments and include them at the end of the loan term. This plan does not forgive the delayed payments, but simply delays them until the end of the loan.
It should be noted that while this is a very encouraging sign to those who may be struggling with their mortgage payments, at this stage it is a proposal only and there is currently (at press time) no such plan in place.
Borrowers should assume they must continue making payments on their mortgages UNLESS they have contacted their loan servicer directly to discuss options that may include loan forbearance, modification, etc.
Disclosures Give Transparency to Borrowers
Understanding the Purpose of Your Mortgage Down Payment
Putting Money Into Your Escrow Account
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