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    What to Do When the Pandemic Threatens Your Mortgage

    Forbes magazine recently reported that more than 22 million Americans have lost their jobs due to the Covid-19 pandemic. Among these unemployed are millions of homeowners, suddenly unable to make mortgage payments, who are faced with the possibility of losing their homes. If you or someone you know is in this tough situation, there are proven strategies you can pursue to get mortgage relief until you can restore your income.

    What is Forbearance?

    As soon as it is clear that you will miss a mortgage payment, you should contact your mortgage servicer to request forbearance. This is a way to temporarily hit the freeze button on your mortgage, allowing you to make reduced payments or to suspend payments for a period of time.

    To contact your loan servicer, start with the customer service number you may find on your payment notice or on the website for your online mortgage payment.

    How Will I Make Up the Missed Payments?

    Depending on your servicer, you may be able to set up an agreement to essentially lengthen your mortgage, putting the missed payments at the end. Another method is to increase the payment, until the missed amounts (and interest) are recovered.

    What is Loan Modification?

    If you get a new job and your loan servicer is confident that your crisis has passed, you may qualify for loan modification. This is essentially the same thing as refinancing, where you get a new mortgage with a longer term or a lower rate. The objective is making the loan current at an affordable payment.

    New Borrower Protections in the CARES Act

    The Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed by Congress in 2020 and strengthened in early 2021, provides two new protections for homeowners who have a mortgage which is backed by either the Federal government (FHA,VA or USDA) or by a government-sponsored enterprise (Fannie Mae or Freddie Mac).

    The first new protection is that (for these federally-backed loans only) the loan servicer may not foreclose until after February 2021. This deadline may be extended by the next Congress.

    The second new protection is that if you are experiencing financial hardship due to the coronavirus pandemic, you have the right to obtain forbearance for up to 180 days. It may also be possible to obtain an extension for an additional 180 days. Moreover, your lender or loan servicer is not allowed to add fees or penalties (beyond the scheduled interest).

    Where to Learn More About CARES Act Protections

    The Consumer Financial Protection Bureau has published a 9-page Homeowner’s Guide to Success, which covers the CARES Act in more detail. You can download the guide at this link:


    Watch Out for Scammers!

    There are mail, telephone and email mortgage scammers trying to trick homeowners into revealing financial or personal information. Make sure you are communicating with your actual lender or loan servicer. If you can’t tell, or if you are not sure how to proceed, you can find a government-approved housing counselor through HUD, the Department of Housing and Urban Development. Call HUD at 800-569-4287, or contact them online at https://www.hud.gov/i_want_to/talk_to_a_housing_counselor

    Finally…If Your Mortgage is Already Current, Now is a Great Time to Refinance

    If you don’t need help with your mortgage, but would like to get a better interest rate, a longer-term or a lower payment, now is a great time to talk with a LendingShops mortgage advisor about refinancing.    You can set up an appointment online at www.LendingShops.com or call us today at (972)-458-8888.


    4101 McEwen Road suite 140, Dallas, Texas 75244

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