If you are going to be impacted or have been impacted by the Corona-virus, COVID19, you may be able to get a little relief in the way you are currently paying your mortgage.
This is going to depend on who has your loan. Are they Fannie Mae or Freddie Mac? If that is the case you may be able to get a partial break on payments, amounts or even a moratorium on future payment for a pre-agreed period of time.
Fannie Mae and Freddie Mac have about 1/2 of the loans that are currently in place for residential real estate mortgages.
"Our thoughts are with everyone who may be impacted by COVID-19 and we urge you to stay safe and well during these unprecedented times," This was a quote from Malloy Evans, who is the senior VP and Single Family chief credit officer for Fannie Mae - he said this in a press release. "Fannie Mae, along with our lending and servicing partners, is committed to ensuring assistance is available to homeowners in need. We encourage residents whose employment or income are impacted by COVID-19 to seek available assistance as soon as possible." Malloy Evans continued.
If you have a different servicer - if your home loan has been sold to another lending entity, the place where you may out your monthly payment to, contact them and find whom you need to speak with.
They may have a direct department that will help you. Whatever you do, before you stop making your payments or send in a reduced agreed upon amount, make sure you get the "agreement" in writing.
The last thing you want when trying to get some relief during your being out of work, laid off or an employee of a "non-critial" employer if to have your credit destroyed because of a verbal promise by your lender.
Who is the mortgage relief good for?
If you have a lender that is willing to hold your future payments for the next year, then you resume as normal on April 1, 2021, for example, this may be a huge help to someone who has been laid off as a result of the virus.
In fact, some people may only be laid off for a month or two. Some, as a result of this virus, have lost their jobs altogether because the business they worked for folded up and closed shop permanently.
The first consideration is what type of position will you retain when this is over? Are you going to still have a job with your same employer and making the same as you were before? Or are they considering downsizing for an undecided amount of time due to the hit they took during this mandatory quarantine of non-essential businesses?
Maybe you are self-employed, as we are in real estate. How long will it take to get back to receiving money from our business is going to depend on the overall market impact.
Currently, in real estate, escrows are being canceled and lenders are pulling out during the final days of the escrow process. The lenders really don't know what to do. In the last real estate market collapse, the collapse was due to the market itself and the loose regulations on the subprime lending practices.
You couple that will very expensive real estate touting a high demand and you have the recipe for a bubble bursting.
This is an entirely different scenario. It will pass and real estate will recover. The question is will there be an impact on the housing prices?
Due to the refinance market that we have been experiencing for the past couple of months, we probably won't go the way of a lot of homeowners' impulse selling their homes. That would flood the market with a lot of inventory and change the market dynamic from a seller's market with little inventory to a buyers market with a ton of inventory.
Also, what are loans and lending interest rates going to look like after the Stock market gets back on its feet? When the stock market is down, the Bond Market is great and that strength in the bond market is what has to do with interest rates reducing.
If the stock market rebounds strongly then the bond market may weaken and interest rates will rise, but how much?
And will those new higher interest rates be enough to put the market in a slower way?
If you are a business owner, you may depend on homeownership and those utilizing your business to earn you a living. If that is the case, I'd make the call to your lender today to see what they have put into place to help you with your future mortgage payments until this blows over and you start recouping damages.
Be good to each other, be well and I know we will come out of this stronger, it's just going to create a bit of stress in the process.
If you have any questions, please reach out to me and I will take great care of you.