Historic townhouses in the neighborhood of Colombia Heights, in Washington DC, USA
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Homeowners battling the coronavirus pandemic received some good news on Tuesday, and the Biden administration announced it would expand tolerance and exclusion relief programs.
The White House said the measure will benefit the 2.7 million homeowners currently within Covid’s tolerance and expand the availability of tolerance options for about 11 million other government-backed mortgages across the country. .
“Because the crisis lasts much longer than anyone anticipated, it’s only worth expanding the resources we know work,” said Sarah Gerecke, an associate professor of planning at New York University. Many of these relief options were expected to expire next month.
Do you have questions about the new protections? Here are some answers.
Does my mortgage qualify for new protections?
Federal-backed mortgages, or about 70% of borrowers, are eligible for additional tolerances.
If you have this home loan, you can sign up for an abandonment until June 30 and potentially for six months. If you have a Fannie Mae or Freddie Mac mortgage, you can delay your payments by at least three more months.
“The easiest way to find out if you are eligible and apply for a down payment if you need to is to contact your lender,” said Greg McBride, chief financial analyst at Bankrate.com.
How can I request tolerance?
Will I have to prove that I meet the requirements for tolerance?
Heavy paperwork requirements prevented many homeowners from receiving relief during the 2008 crisis, McBride said.
Fortunately, during the pandemic, you just have to prove that you have suffered financial difficulties.
Do I have to do anything if I already have patience?
Yes. Your tolerance will not be automatically renewed.
“You have to contact your lender and ask for it,” McBride said.
How long can I be in tolerance?
Some people will remain in tolerance for 18 months, as the first stimulus package passed in March, the CARES Act, offered homeowners two 180-day relief periods and now the Biden administration is granting them two additional breaks of three months.
How will lost payments be calculated?
Fortunately, if you meet the tolerance requirements, you will not have to offset your payments in a lump sum at the end of the relief period. (Although if you are one of 30% of homeowners who do not have a government-guaranteed or government-guaranteed mortgage, you may do so).
Instead, you can ask for your payments to be made by the end of your loan, McBride said.
For example, if you missed 12 months of payments, a 30-year mortgage would take 31 years to pay off.
What if I am at risk of foreclosure?
You should be safe until at least the end of June.
“You will not be seized during the moratorium period unless you have abandoned or abandoned your property, ”said Sara Singhas, director of loan administration for the Association of Mortgage Banks.