B4 • Friday, May 21, 2021
thegardenisland.com
THE GARDEN ISLAND
Ease out of forbearance, avoid foreclosure write your servicers. The CFPB has information online for consumers on how to do this.
Sarah Skidmore Sell ASSOCIATED PRESS American homeowners were given more opportunity to hit pause on their mortgage payments because of the financial ravages of the pandemic, but that relief is slowly coming to an end. About 3 million people are behind on their mortgage, the most at any time since the Great Recession, according to the Consumer Financial Protection Bureau. About 2 million are in forbearance plans, which provide a reprieve of a year or longer from making payments. Some people are beginning to exit these arrangements, but experts say the pace will soon pick up, with as many as 1.7 million borrowers exiting in September. Regulators have warned mortgage servicers to be prepared for the onslaught. Those who are unable to resume payments or reach some other agreement with their lender may be forced to leave their homes through sale or foreclosure. Experts say homeowners who are in forbearance should start making plans as soon as possible for their next steps — be that resuming payments as usual, tweaking the terms of their loan or leaving their home. Here’s what borrowers should know:
If you cannot afford payments If you have a federally backed loan and are nearing the end of your forbearance period you may request up to two additional threemonth extensions — although the maximum forbearance period cannot exceed 18 months. This only applies to those who received their initial forbearance on or before February 28, 2021 for loans held by Fannie Mae or Freddie Mac or June 30, 2020 for HUD, FHA, USDA, or VA STEVEN SENNE / ASSOCIATED PRESS FILE PHOTO loans. If you are struggling with A for sale sign stands in front of a house in Westwood, Mass. American homeownpayments, servicers are ers were given an expanded opportunity to hit pause on their mortgage paygenerally required to discuss ments because of the financial ravages of the pandemic, but that relief is slowly relief options with you, coming to an end. whether or not your loan is If you can afford federally backed. of loan, there are several those missed payments on payments It’s important to reach out to the end of the loan period, processes in place for to your mortgage servicer as borrowers with federally said Andrea Bopp, an Homeowners who soon as possible to discuss backed loans. However, attorney at the National received a COVID hardship your options. If you need there are no universal forbearance are not required Consumer Law Center who programs to help those with help, talk with a free HUDspecializes in mortgage to repay their skipped privately held loans ease out approved housing servicing issues. payments in a lump sum counselor; they can be Borrowers may also work of forbearance; these once the forbearance period represent about one-third of found online. Or you can with their servicer to find ends, the CFPB reminds seek out legal help through other arrangements, such as all mortgages. borrowers. Legal Aid or by reaching out All the same, servicers increasing the size of their Contact your mortgage have been encouraged to be to your state bar regular payments to help servicer to discuss your flexible to find arrangements association. make up their missed options. that work for all borrowers. payments. In some cases, If you can resume your Last resort The CFPB has a wealth of pre-pandemic payments, the the servicer may create a The last resort is for a information on its website separate account for the process should be fairly homeowner to leave their unpaid payments that would to help borrowers sort out smooth. Many federally home through foreclosure. their options. backed loans have programs be settled upon the sale, In a foreclosure, the If you do not know who transfer or refinancing of the in place that will allow holds your loan, check your lender takes a property back loan. homeowners to resume The options vary by type mortgage statement, call or after a borrower fails to payments as usual and tack
US average mortgage rates rise; 30-year loan at 3% ASSOCIATED PRESS WASHINGTON — Mortgage rates rose this week, pushing the benchmark 30-year home loan to the 3% mark for the first time since mid-April. Signs continued of the economy’s recovery from the pandemic recession and a burst of inflation rattled stock markets. Mortgage buyer Freddie Mac reported Thursday that the average for the benchmark 30-year homeloan rate increased to 3% from 2.94% last week. At this time last year, the long-term rate was 3.24%. The rate for a 15-year loan, popular among those seeking to refinance, rose to 2.29% from 2.26% from last week. The government reported last week that a worrisome bout of inflation struck in April, with consumer prices for goods and services surging 0.8% — the largest monthly jump in more than a decade — and the year-over-year increase reaching its fastest rate since 2008. The report showed sharply higher prices for everything from food and clothes to housing. The acceleration in prices, which has been building for months, has unsettled financial markets and raised concerns that it could weaken the economic recovery. The spike in inflation caused stock markets to tumble this week because investors worry that higher prices will force the Federal Reserve to prematurely cut back on its efforts to stimulate growth. The Fed has set as its goal keeping its key interest rate near zero until the economy recovers from the pandemic.
make all the required payments. There is a foreclosure moratorium in place for all federally backed mortgages — those backed by Fannie Mae, Freddie Mac, FHA, USDA, or VA — until June 30, 2021. However, borrowers may be able to avoid foreclosure if they seek help to make other arrangements, be that through their servicer directly or with the help of a housing counselor or lawyer. Experts urge homeowners not to wait until the forbearance period is over or the foreclosure moratorium ends. Once the foreclosure process begins it is difficult to stop and foreclosures are expensive for homeowners, with an average cost to borrowers of $12,500. In some cases, people with equity in their homes may be able to sell their home to avoid foreclosure, which has a not just a devastating financial but emotional and mental impact on families. Not every delinquency leads to a foreclosure though, notes Odeta Kushi, deputy chief economist at First American. She said that rising equity and home prices may allow more borrowers to sell, causing more of a “foreclosure trickle than a tsunami” ahead. All experts urge homeowners to reach out to their mortgage servicer as soon as possible to allow for adequate time to make an exit plan from forbearance.