(WHDH) – Millions of people who have gone through difficult times during the pandemic have reached a financial lifeline to stay at home. But soon, this relief may end. 7’s Hank Phillippi Ryan reveals why it’s time for action.
The cupboards are empty. The shelves are bare.
“It’s mostly what was in the living room,” says Fernando.
Fernando packs his family’s things for a move they hadn’t planned on doing.
“It’s hard to say goodbye,” says Fernando.
He lost his job as chief financial officer last year and couldn’t afford to pay his mortgage.
“I had a lot of sleepless nights,” says Fernando.
He called his lender and asked for forbearance, a financial lifeline that allowed him to defer mortgage payments for months.
But as the pandemic spread, his indulgence ran out. Fernando still didn’t have a job and now he owed $16,000 for those delayed mortgage payments.
“It’s moving,” says Fernando.
Millions of homeowners like Fernando entered into forbearance agreements with their banks because of COVID. And for many, the break on their payments soon runs out. So they have to figure out how to pay that money back!
“If your loan is forbearance, doesn’t that mean it’s forgiven?” Hank asked
“No, it is not forgiven. You will have to pay either now, later or when the loan ends. You will have to pay at some point.
Nathalie Kallab Racimo, home ownership and financial services advisor at the Affordable Housing Neighborhood, Inc. (NOAH) says.
Fernando decided his best option was to put his Methuen home on the market and use the money from the sale to pay off his missed payments and the rest of his mortgage.
“You always want to leave your house on your own terms rather than having to leave,” says Fernando.
But selling is not your only choice. Experts say you can call your lender and negotiate a few different options.
- You can request that your abstention be extended.
- You can request that your missed payments be added to the end of your mortgage, but not paid in one installment
- You can try to work out a new repayment plan or a loan modification, in order to pay what you can afford.
Ultimately, you have to do something.
“So if you don’t do anything when your forbearance is over, and you still can’t pay, the bank might foreclose?” Hank asked.
“If you don’t do anything else, you will probably lose your house and it will change your life and it will be devastating,” says Nathalie.
Fernando is grateful that his house was sold quickly. Once the deal is done, he’ll be able to catch up on missed payments, pay off the rest of his mortgage, and have some extra cash.
And he has found temporary accommodation for his family while he continues to look for work.
“Hopefully there are better things to come,” says Fernando.
If your patience is running out soon, don’t panic. Lots of free help is available, including advisors who can help you and financial assistance to help you make your mortgage payments. And if you have a federally guaranteed mortgage, you have additional options.
For more information:
Nathalie Kallab Racimo
NOAH, home ownership and financial services advisor
Email: [email protected]
Consumer Financial Protection Bureau (CFPB):
If you’re late with a payment, get advice or help. Don’t ignore the problem.
Don’t panic. Foreclosure is a process that can take six months or more. Contact immediately and get help, but do not leave the property.
Contact the lender: Ask about options for modifications or forbearance. When you contact your lender, be sure to take notes of your conversations and discuss all of your options. If you feel that you are not making progress, you can always raise your file.
If you need help, she is available. You can access a Foreclosure Prevention Program. NOAH, for example, regularly hosts foreclosure prevention and mitigation workshops accessible to people in the Greater Boston area with a very high rate of positive resolution.
If you are having difficulty paying your mortgage and you are the owner-occupier of a 2 or 3 family home, the Covid Evictions Legal Aid (CELHP) program will provide you with legal assistance. You can help your tenants access rent assistance to pay their arrears, which will help you pay your mortgage.
Access financial assistance: Homeowners may be eligible for assistance programs up to $4,000 (depending on which program they qualify for, based on their income).
RAFT (Home help for families in transition) is for households earning 50% of the regional median income (AMI).
ERMA (Emergency Rental and Mortgage Assistance) covers people up to 80% of the AMI, both are state-funded programs.
Also, some cities have assistance programs that can help you. Call 211 to connect.
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