When you are unable to fulfill the contractual obligations of your mortgage agreement and your lender begins the process of reclaiming your home, there are options they may offer you to keep you in your home, such as:
Forbearance – Your lender agrees to lower your payment or suspend your mortgage payments for a specified amount of time. The missed payments will then be tacked on to the end of your loan term. According to the Consumer Financial Protection Bureau, homeowners should be careful when requesting a forbearance, since interest continues to accrue during the reduced or paused payment period. You may be required to pay everything back at once in one lump sum or make higher monthly payments to cover the suspended payments.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act allowed homeowners who had loans that were backed by the federal government (FHA, VA, USDA, Fannie Mae, and Freddie Mac loans) and who were experiencing financial hardship due to COVID-19 to request the temporary suspension of payments for up to 180 days and to request an additional 180-day extension.
In some cases, at the end of the forbearance period, you may be unable to make the payments on the remainder of your loan. Whenever you are seeking forbearance, it is imperative to ask how and when you will be required to repay the suspended amount. If you requested forbearance and are now unable to make your mortgage payments, our team can help.
No matter what your situation, whether it is related to the coronavirus pandemic or not, we can get you money for your home prior to auction. For instance, if your lender allowed you to postpone payments for up to 3 months, but you are now unable to repay the amount and are facing foreclosure, we can help you avoid auction and sell your home fast. We can close escrow in as little as 7 days, helping you get the cash you need now and avoid foreclosure. Call Todd Home Offers today for more information on selling your home after forbearance.
Loan Modification – The terms of your current loan are restructured to make your monthly payment more manageable. In order to apply for a loan modification, you will need to contact your mortgage servicer and may be required to provide proof of financial hardship.
While these options will keep you in your home, they are all contingent on the fact that you will still be able to pay the remaining balance of your loan in due time. Depending on your situation, these choices may not be right for you. If you are facing foreclosure in California, we can discuss your options with you and help determine the best course of action.