Loan forbearance is set to end soon. Now what? Residents of Waco and other areas of Texas may want to learn more about the next steps that a homeowner may take. Avoiding foreclosure is on the minds of many in this situation.
Mortgage payments have been on hold because of the pandemic. It is thought that by September, about 2 million people will exit the program, which gave them a year or longer for making payments. According to news sources, individuals who cannot resume paying their lenders may face the options of selling or foreclosure. For those who are in forbearance, experts agree that the time to start thinking about their next move is now. There are some different options for people who are able to resume making payments.
When you can afford to make the payments
Those who received the COVID hardship forbearance do not have a requirement to pay the lump sum at the end. You should contact your mortgage broker to discuss it.
Some programs will allow you to tack on missed payments at the end of your loan period. On the other hand, working with your servicer, you may increase each payment to catch up.
Several processes are in place if you have a federally backed loan. Privately held loans, which account for about a third of mortgages, do not have one universal program to help borrowers. Servicers have been encouraged to find flexible arrangements for borrowers in forbearance.
When you cannot make the payments
You may ask for up to two three-month extensions if you have a federally backed loan. However, the maximum forbearance period may not exceed 18 months. This is for loans that initially received forbearance before February 28, 2021, for loans held by Freddie Mac or Fannie Mae or June 30, 2020, for HUD, VA, USDA or FHA loans.
What is the last resort?
Homeowners may have to file for bankruptcy or accept foreclosure unless they can make other arrangements. Individuals may be able to avoid these options if they plan in advance.
If you are facing bankruptcy, it may be wise to consult an attorney that has experience with this law. He or she may help you move forward.