Published on April 2, 2020 | https://www.linkedin.com/in/bobsorey/
Have you been laid off or are in fear of being laid off, and own a home with a FHA mortgage? There is good news for you and your home mortgage, if you follow this simple advice. Here is the answer to getting relief from your mortgage servicer for up to 12 months. And at the end of those 12 months, you can just pick up with where you left off, without the fear of having a large balloon payment due. That’s right! You just start paying the same payment again. The only issue will be IF someone in the past talked you into refinancing your FHA loan. Refinancing your existing loan might have saved you from paying mortgage insurance (as it’s commonly referred), but its proper term is Mortgage Insurance Premium. Oh, they also do it because they make alot of money doing it too…
Late last night, HUD issued Mortgagee Letter 2020-06 which addresses what I’ve been expecting, and am really surprised to see, from Mr. Brian D. Montgomery, Assistant Secretary for Housing, Federal Housing Commissioner, and who typically issues these letters (or better yet) as instructions to everyone who has an interest in FHA Mortgages. This letter goes into the details about how mortgage servicers, also know by many as either mortgage companies or just banks, will handle every FHA loan that goes in arrears because the homeowner says they need to skip payments for up to twelve months. I’ll tell you how to find out if yours is a FHA mortgage at the very end of this article.
The people who worked on this project have won the war against the virus, protecting scared Homeowners who are worried about losing their home. For they are the folks who stayed late, worked long hours, modeled and remodeled the loss mitigation models, creating flow charts of how things would and will happen if the President was to announce a thought for how the FHA housing program could help Homeowners skip payments and ultimately calm their fears. President Trump said no payments or evictions for 60 days, HUD made that announcement in ML2020-04. ML2020-05 (Mortgage Letter) and then tonight's ML2020-06 are game changers! They’ve gotten it right! Looking back, working to keep people in their homes back especially in 2007-2010 was tough, but reading this document tells me things could be much easier with both Forbearance and Partial Claims for Covid-19 in 2020. As simple as picking up the phone and calling your mortgage company or writing a note and mailing it in with your mortgage payment! The Servicer (your bank or mortgage company) must grant you a Forbearance (forgiveness opportunity) for an initial period of up to six months, and then you may request an additional six months, if needed. You may ask, “what happens at the end of the time when all this is over and that money is all added up and due at once?” The mortgagee letter continues to give instructions for a Partial Claim with a much longer and CovidSpecific Name. HUD is expanding their loss mitigation program so that this is covered for when people pay their (Up Front) Mortgage Insurance at closing, & to make this virus-specific program work for those Americans who have paid for this loan program that is especially designed to help first-time homeowners in the event of an national scale event like Covid-19.
Your loan originator can tell you if your loan is an FHA mortgage. But if they talked you into refinancing, you may not want to ask them if they broke your arm with a refi that left you without coverage but…. Outside of asking your loan originator, you can go to your county’s Register of Deeds’ office. Have them pull the front page only of the Deed of Trust for your property. They can search for it by the property address, subdivision and lot, or your legal name. On the middle, right side of the first page, you will see a box with a FHA case number (if you loan is a FHA loan). If your loan is any other type, it will not have this loan box or number on the first page. In addition, if you find this FHA Case number on one page, you should also see if there is an additional recording that is more current as that is the current owner.**If you refinance, and stop paying for MI, PMI, MIP the service or Insurance stopped. This new re-finance loan may not have any mortgage insurance included now for your protection. It is important to check, especially if you have made a re-finance on this property.
Before considering a re-finance on your property for a smaller interest rate/monthly payment, consider the long term protection you may give up for a short-term problem (unemployment, lay-off, national pandemic). Who could have foreseen this worldwide pandemic coming, when interest rates were dropping so low? Knowing that you have mortgage insurance in times like these means the difference of no payments versus no excuses.
If you have any questions or your FHA Lender/Servicer gives you any problems email Research@Banks.Exposed
Questions about FHA loans and foreclosure prevention? I've got Bob Sorey here, Realtor® in Tennessee, and he has actual real-life answers!
REALTOR®. Author. Coach. Keynote speaker. Leigh Brown is laser-focused on inspiring people to be better, strive for more, and to take the reins and lead!
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