The COVID-19 payment deferral plan for missed mortgage payments
As one of the COVID-19 consequences, many homeowners have lost their ability to make mortgage payments.
The Federal Government, with the intention of protecting the Americans and the economy from what could be one of the most devastating recessions, approved the Forbearance Plan among other measures.
The forbearance plan gives relief to people who are having difficulties to do their mortgage payments because of the Corona-virus hardship.
Those who have lost their jobs or businesses and in general homeowners who have little or no income due to the corona-virus crisis, may be forbearance plan beneficiaries.
Homeowners who are paying mortgage loans backed by any of the federal agencies, can agree with their loan owners to suspend or reduce the amount of their monthly payments for up to a maximum period of 12 months without incurring in late fees and penalties.
Also, depending on the loan agreement, they can move the unpaid mortgage amount until the maturity of the loan, or pay it off at the time the property is sold.
According to the recommendations of the program, the mortgage payments can be deferred for six months and after that time, the regular payments can be resumed, canceling the overdue payments amount in a slum sum or distributing the due amount between the following 6 months.
This program has been created to help homeowners who are currently on their home loans payments, but have lost their income because of the health crisis.
The forbearance plan help is intended to give fresh air to homeowners falling in default, so, during the time of suspending or reducing mortgage payments, they can get back on their feet and resume their obligations.
To be eligible for the Forbearance program, you shall meet the following requirements
- Your Mortgage must be backed up by one of the home loan federal Agencies.
- You have defaulted on your mortgage due to the Corona-virus
- You cannot get your loan current with one payment.
- You cannot make additional payments for a period of time to bring your loan up to date.
- You were currently on your loan or less than 31 days behind on your mortgage by March 31, 2020.
The COVID-19 deferred plan offers you a way to get your monthly payments back on track.
What My Credit Report Will Show?
Your credit report will reflect that you are current with your home loan:
- If you were not behind on your mortgage payments at the time of requesting deferred payments.
- And, if you make your home loan payments on time to meet the COVID-19 deferred payments agreement.
If you have any questions about the CARES Act, and the COVID-19 deferral payments plan, contact your lender, the local and government authorities or contact Better Off Home Buyers, we can help you to get the information you need.
What Have The Experts to Say?
“As of August 3, approximately 4 million homeowners were inactive forbearance, the lowest such share since the last week in April and representing 7.5% of all active mortgages, down from 7.7% the week prior. Together, they represent $ 852 billion in principal unpaid. ” Black Knight, McDash Flash Forbearance Tracker.
Calculated Risk in its publication of August 7, 2020 says that by the end of June there were about 2.5 million deferred plans about to expire, and that with the 3-month extension, now more than 2.2 million plans should expire by the last day of September 2020.
Currently there are about 4.5 million active deferred programs, which means that by the end of September and beginning of October we will see a wave of new plan extensions and moves.
Because of the discrepancies between congress and the White House agreeing on how to solve the economic crisis and to aid the unemployed by the epidemic, added to the protests that are still taking place in our city of Portland and across Oregon, the near future is uncertain.
Forbes in its August 6, 2020 publication written by Dima Williams says that the FHFA, the body that oversees Freddie Mac and Fannie Mae the two federal companies buying mortgage loans, announced that it is mandatory that owners of multi-family complex whose mortgage loans are under some deferred payment program, inform their tenants about of their rights.
The FHFA also ordered that no landlord may charge a fine or file an eviction against a tenant who cannot pay his rent during the time the landlord is benefiting from the deferred payment plan.
The panorama is not clear for the months to come, but it is foreshadowed that a large number of defaults on mortgage payments may appear which hypothetically would put us in a superfluous number of foreclosures and evictions.
Many analysts believe that by the end of 2020, a large number of home loans will be starting to see their route of legal actions by lenders for the breaching of the terms of the loan agreements.
If regulations and precautionary measures do not stop the spreading of the corona-virus, the economic crisis will continue to hit at all levels. There will be more mortgages on default, which could make 2021 a year with a saturated real estate market to such an extent, that property prices will plummet.
Why The Home Prices Increased During June and July?
At Better Off Home Buyers we are analyzing and monitoring all the indicators of the Portland and Oregon real estate market daily. By April we were able to predict that in the following months house prices would rise up to 10% due to the lower interest rates and fewer properties available for sale.
We believe during August and September the real estate market trend will continue the same. We will see more houses available for sale on the market, but the outlook will change for the last quarter of this year where we will see a decline of the market. loan interests will be higher, and home prices will go down.
“There are a lot of dark clouds on the horizon,” says CoreLogic Loan Performance Insights Report.
Many homeowners will find it difficult to recover financially. If after October deferral payment programs are not extended, chances are that by the end of 2021 we will be going through a severe recession, then it will make it almost impossible for many to sell their properties before they have to face a foreclosure.
Will I Sell Fast My Portland Home In 2020?
The Portland real estate market started strong in 2020, but for March and April it suffered a sharp decline due to the effects of the corona-virus. For the following months it has presented a significant rebound due to lower interest rates, but the Portland market performance is still 17.6% less than in 2019 at the same time, with fewer houses available for sale.
This combination has made some properties sell quickly and for a good price. At Better Off Home Buyers we believe that this market reaction in times of crisis is not something that will be permanent.We agree with the economy and real estate experts opinions, that in late 2020 and mid-2021 we will see avalanches of abandoned properties and dozens in foreclosure proceedings.
The home sale time through the regular market will exceed the 90 days that it takes in normal conditions. Many properties will not be sold through the lists of Realtors offices, which will result in a very heavy burden for the owners that are financially hurted.
The good news for those who need to sell their house in Portland, is that our company has the logistics and all the necessary resources to buy their properties.
If you need to sell your home in this time of crisis and uncertainty, contact us, in less than 24 hours we will present you an offer, which could be the solution to your problems caused by your income loss.
We Buy Houses On a Deferred Payment Plan.
If the predictions come true, unless the Coronavirus epidemic has been controlled and we have returned to our normal lives with the production machinery in full swing, by the end of 2021 in the United States we will have close to 4.5 million foreclosures,
The mortgage loan deferred payment plan is one of the many measures that the authorities have taken to prevent us from having an economic catastrophe. At Better Off Home Buyers we consider these to be very important measures, but if unemployment remains at today’s numbers where we are close to 18% nation way, 14.7% in the state of Oregon and more than 12% in Portland.
The pre-foreclosure home listing will climb record numbers.
Obviously, no one wants this to happen, but there will be homeowners whose money situation will force them to stop making payments.
Going through the experience of not being able to pay for your dream house and eventually having to vacate it, is an intense emotional situation, it is a trauma that affects the whole family for a long time.
If you are going through this experience, do not remain immobile!, seek help right away, get advice on the options you can have to keep your home, the deferred payment program can give you a hand temporarily, but if income problems continue, the plan won’t really solve anything for you. The only thing that will happen is that you will be prolonging all the burning and pain of losing your home.
Selling your house when you cannot continue making your mortgage payments is a smart solution. The credit score is saved, some money can be recovered if the property has equity. And most importantly, you can start all over again without the inconvenience of having a repossessed home stain on your credit history report,
Effects of a Negative Credit Report.
A high credit score opens all doors. Not paying the commitments on time or not paying them completely, produce low numbers on your credit report. A foreclosure on your credit history nullifies you from getting another home loan for at least the next 7 years.
Any request for credit in most cases will be denied or you will be given the highest interest in the market.
Better Off Home Buyers Buy your House.
Our company is willing to help you in case you need to sell your Oregon house. If you are in the COVID-19 deferral payment plan, after you contact us, we will make you an offer for your house in less than 24 hours.
Currently, we are helping homeowners who are in the deferred payment plan. Our process to buy their properties is very much the same we use in a normal Investor home purchase transaction.
After a client has contacted us for the first time, over the phone we set a virtual or on-site appointment to visit his house. Following our client’s home inspection. We are able to present him with a written offer to buy his property. Clients can take all the time they need to accept our cash offer.
After a client has accepted our offer for his house, we initiate the paperwork to execute the purchase. Regularity in a 7 days period they receive a check representing their home value, closing the home sale.
As people we have no control of all situations, but we have the power to adapt ourselves to them. Sometimes sickness, personal issues, relocation, or unpredictable events like the COVID-19 pandemic put on line of fire our human strength. But under any circumstance we will prevail.
Selling your house due to the madness the coronavirus has caused may be the right decision today. It could be better now than later. With time you will have the opportunity to work with a better fee on yours and your family’s lovely dreams.
Contact Better Off Home Buyers filling out the information form in this page or dialing directly (503) 212-9641.