Homeowner Delay Mortgage Payments – Corona Financial Crisis

There Are Things You Can Do Now

delay mortgage paymentsThis is a very difficult time for our country, Individual and Families.  I also believe this will be a short lived temporary time given the Economist reports and how South Korea has responded to the Virus. 

For anyone that has been affected financially by the Coronavirus there is some help you can take advantage right now.  Homeowners can delay mortgage payments up to 12 months. 

Who will this apply to
  1. You must be homeowner
  2. You must of been financially affected by CoronaVirus this could be
    1. Lost partial Pay
    2. Reduction of Pay
    3. Laid off due to situation

It is important to note you do not have to have the virus to qualify. 

What types of properties?
  1. This applies to 
    1. Primary Home
    2. Second Home
    3. Investment Properties

Right now it only applies to Fannie and Freddie Mac loans, BUT many other lenders are following the same guidelines even if they are not REQUIRED to. Think about it they are borrowing money from the Federal reserve at 0% so if thay are getting money for free why not?

How do you know if you have Fannie or Freddie Mac loan?

The first thing you need to do is CALL your Service Provider.  The phone number on your loan statement. Call and say you are looking for a Mortgage Deferral due to Financial Hardship with CoronaVirus. 

Ask them if your loan is Fannie or Freddy Mac.

They will typicall get your information and have a speicalist call you in a few days or up to a week

While you are waiting for the call don’t wait around.  The bank is going to want to see some documents to prove your hardship

Start with a letter explaining the situation, that you had income reduced, that your company had reduction in work force. Get a copy of the layoff your employer gave you. Be ready for the call.. 

Letter of hardship is basically explaining why you suffered hardship due to the Virus.  It does not need to be a novel, but should have the facts. For example 

To Whom It May Concern:

This letter is a request for a “short sale” of my home located at 13567 S. 58th Lane, Your Town, UT 00011. I had been working for Utah Concrete for 5 years when this last until March 10 of 2020 when the Corona Virus hit. The company cut back on my hours. This has made finances difficult. I was with Paid $3,000 per month, I had great reviews and  the company was doing well.  Then on March 10, 2020 the company I worked for went down 50% and my company had to cut bonuses. This was a loss to be of $500 per month and has been very difficult on my family. 

Thank you for reviewing my request.




John Doe

They may also want the last few years of financials. 

The bank will then take that informatoin and make final determination as to how long

The bank can defer up to 12 months. TO BE CLEAR this does not mean you are not going to own the money. It just means you can pay it later

For example sake, lets say you owed $100,000 on you property and your monthly payment was $1,000 per month for.  If the bank Let you go 6 months without making the payment at the end of 6 months you would owe the bank $6,000. So the bank would say can you pay me the $6,000 now, if you could you would pay it, if not they would take the $6,000 and add it to your amount owed so you now owe $106,000. Then they would adjust your MONTHLY payment by the additional amount that was increased based on the interest rate you had.

Lets say your rate was 5% and you had 27 years left on your loan. The additional 6,000 would add an additional $33.78 per month for the remaining 27 years on your loan. 

In some cases the lender may extrend the loan term as well so take the loan from 27 years to 30 years to lower the amount added to your payment.

So this is NOT free money, but it can sure make it easier to NOT pay $6,000 now and pay that off over time at $33 per month. Now of course it will vary based upon  your payment amount, your interest rate, and your loan term. It will also depend on how many payments they defer  And this is just for example purposes. 

Get Started now, don’t wait, pick up the phone and call your service provider if you have had income loss due to corona. . The phone number on your mortgage statement. 

If you are approved this, and most will, it can have a real impact, you will not have any lates on your credit report, and that is a big positive. 

IMPORTANT – This does not automatically apply.  You have to pick up the phone call and get approved

Things change all the time and we will do our best to keep this updated. If you have experience with payment deferral please post it in comments. 

I would recommend call your mortgage company right away. I don’t see any down side to this, you don’t have to fall behind on payments and they are not going to negative report you to credit agencies.  Don’t stop making payments until you have everything in writing from them,  including they wont report to credit reports.