The CARES Act of 2020 provided a relief to homeowners in a way that has never been seen before in the US. It is called forbearance. The Federal government instructed mortgage servicers to allow borrowers to suspend payments on their mortgage if they desired without any penalty or question. This is a stark contrast to the current way servicers handled a borrower that was having a problem paying on a mortgage. Before the Act a borrower had to prove financial harm and then if the servicer provided relief it was a negative mark on the consumers credit. Now with the Covid-19 crisis, borrowers can get relief from paying their mortgage for up to 12 months with no questions asked. However, don’t call your mortgage servicer so fast. Here are the rules:
- Forbearance is NOT forgiveness. You have to pay it all back.
- You have to call your servicer, do not just stop making payments. They will grant usually with no proof.
- You credit will not be harmed.
- You have to have a written agreement with the servicer for your type of mortgage and agree on how many payments to “skip”.
- You will have to pay those payments back at the end of that agreed upon period in full.
- If you can’t pay it back, you will have to work with your servicer to come with an agreement on a pay back….over time or end of mortgage.
- It is recommended you do not ask for forbearance unless your situation is critical. You could end up in a worse position later. Plus you tie up the call line for those that are truly in need.
I hope this helps and remember you can always reach out for any mortgage questions: Rob Schurr / VP/ The MyHome Mortgage Team / 410-571-4605
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Tammi was very patient and very helpful throughout the entire application process. Being a first-time home buyer I didn't know a lot of this which made me frustrated but I was able to get approved and now I am a homeowner thanks to Tammi!
— James C.
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Tammi Lewis made my home buying experience very easy. I felt no stress or pressure. Tammi was with me every step and made sure I understood everything with detailed talks. My credit score was low and Tammi advised me how to raise it. So that the Loan process would be approved with no problems. Any one know that wants to buy their first home I am recommending Tammi Lewis and First Home Mortgage.
— Charlie F.
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Rob made sure my experience as a first time home buyer was smooth and painless. Very professional and got things done in a timely manner. Could not have asked for more!
— Samantha J.
Great Experience for a New Homeowner
Rob was at all times, willing to go over the numerous pages of information with me. I am a new homeowner and had many as this was my first time navigating the home-buying waters. He explained things to me in a way that I understood and got me all of my documents in a timely and efficient manner. I enjoyed working with him and would refer him to anyone who is looking.
— Erica F.