Job Loss or Furlough?
By: Irma T. Barrios, Esq.
Irma T. Barrios, Esq. is the supervising real estate attorney with the law office of Glantz & Glantz, P.A., a title agent for Members’ Title Services, Inc., and has over 20 years of experience in real estate law.
Many have put their lives on hold due to the uncertainty over job security, insurance coverage and the future of businesses. However, at this time, everyone should be taking advantage of the lower interest rates for refinancing higher rates and first time home buyers should also be taking advantage of the lower rates to acquire their dream homes. Sellers are encouraged to sell at this time because of the low house inventory. Some buyers are purchasing homes with virtual videos and home inspections.
If you have lost your job or are on work furlough, there are mortgage forbearance programs available to you. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), facilitates mortgage servicers’ ability to place consumers in short-term payment forbearance programs.
Under the CARES ACT, borrowers in a federally backed mortgage loan experiencing a financial hardship due, directly or indirectly, to the COVID-19 pandemic, may request forbearance by making a request to their mortgage servicer and affirming that they are experiencing a financial hardship during the COVID-19 pandemic. Servicers may allow borrowers to defer their mortgage payments for up to 180-days and possibly longer. Be careful though, as this forbearance plan is a temporary suspension of your mortgage payments intended to allow you the time and flexibility to manage the financial challenges affecting your ability to pay your mortgage. The terms of your mortgage remain unchanged and as a result of not making any payments during the term of the forbearance plan, you will become delinquent on your mortgage; however, the accrual of late charges during the forbearance period will be suspended and credit reporting will be suppressed. Upon completion of the forbearance plan, you must contact your lender or servicer to review your financial information and discuss alternatives that may be available to you, such as reinstatement, repayment plan or other alternatives to foreclosure.
Things change and new laws are enacted daily and our firm is here to assist and guide you through the process. Please do not hesitate to call us with any questions and stay tuned for additional updates.