Mortgage Relief – What Comes Next

By: Stephanie Livingston, REALTOR®️ with the Livingston Real Estate Team at Hunziker & Associates

As the current forbearance mortgage relief options come to an end, you may be wondering what comes next. Financial forecasters are indicating the housing crisis of 2008 is not likely to repeat itself in 2021 but some homeowners question how that can be. Simply put, plans have been put in place through forbearance to ensure history does not repeat itself. Within the mortgage relief plans, as well as increased equity, options are available to keep people from having to choose the option of  foreclosure.

As a homeowner, in 2020, you were able to request 180 days of mortgage relief through forbearance. When that time expired, you were entitled to request an additional 180 days. That made a total of 360 days of deferred payment eligibility. Deferment means your mortgage payments are still owed, they have just been put on hold. Thankfully, you do not have to pay the deferred payment back in one lump sum. As Fannie Mae explains, your forbearance plan will come with options for repaying the missed amounts so you don’t have to repay the forbearance amount all at once. As your forbearance expires, it is incredibly important to talk with your lender to discuss these options and create a plan that works for you.

When looking at the stats, it is interesting to note that, fewer people than initially expected are still in forbearance, so the number of homeowners who will need to work out alternative payment options is going down. According to Mike Frantantoni, Senior Vice President and Chief Economist of Mortgage Bankers Association, “Nearly two-thirds of borrowers who exited forbearance remain current on their payments, repaid the forborne payments or moved into a payment deferral plan. All of these borrowers have been able to resume, or continue, their pre-pandemic monthly payments.” Additionally, the average homeowner has gained equity in their home over the course of 2020. This means that if you are still in forbearance and unable to make your payments, foreclosure is not your only option. You may have enough equity in your home today to be able to sell your house, which may be a good option to protect your overall financial investment.

In 2021, the number of foreclosures is not expected to drastically increase due to mortgage relief coming to an end. Fortunately, homeowners have options. If you’re concerned about being able to make your mortgage payments, contact your lender to discuss your options and next steps. You want to have a trusted and knowledgeable professional on your side to guide you through this process and might be the key factor that helps you stay in your home.

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Livingston Real Estate Team does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Livingston Real Estate Team will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

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