Historic terraced houses in the Columbia Heights neighborhood of Washington DC, USA
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Homeowners struggling in the midst of the coronavirus pandemic were welcomed on Tuesday, with the Biden government announcing that it will extend programs of indulgence and foreclosure relief.
The White House said the move would benefit the 2.7 million homeowners currently indulgent in Covid and extend the availability of indulgence options to about 11 million other government-backed mortgages across the country.
“Since the crisis has been going on for much longer than anyone anticipated, it is appropriate to extend the drugs that we know are working,” said Sarah Gerecke, associate professor of planning at New York University. Many of these relief options were scheduled to expire in the next month.
Have questions about the new protections? Here are some answers.
Does my mortgage qualify for new protections?
Mortgages backed by the federal government, or about 70% of borrowers, are eligible for additional tolerances.
If you have this type of loan, you can apply for an indulgence until June 30 and potentially for six months later. If you have a mortgage from Fannie Mae or Freddie Mac, you can delay your payments by at least another three months.
“The easiest way to find out if you are eligible and to seek exemption from payment, if necessary, is to contact your lender,” said Greg McBride, chief financial analyst at Bankrate.com.
How do I request tolerance?
Will I need to prove that I qualify for tolerance?
Costly paperwork requirements prevented many homeowners from receiving help during the 2008 crisis, McBride said.
Fortunately, during the pandemic, you just need to certify that you have experienced financial difficulties.
Do I have to do anything if I am already in tolerance?
yea. Your tolerance will not be renewed automatically.
“You should contact your creditor and apply for it,” said McBride.
How long can I stay in tolerance?
Some people will be tolerated for up to 18 months, as the first stimulus package approved in March, the CARES Act, offered homeowners two 180-day relief periods, and now the Biden government is giving them two additional three-month breaks. .
How will my missed payments be calculated?
Fortunately, if you qualify for the indemnity, you don’t have to make your payments in a single installment at the end of the exemption period. (Although if you’re one of the 30% of homeowners who don’t have a government-backed or guaranteed mortgage, you can.)
Instead, you can ask for your payments to be included at the end of the loan, McBride said.
For example, if you missed 12 months of payments, a 30-year mortgage would now take 31 years to pay.
What if I’m at risk of foreclosure?
You should be safe at least until the end of June.
“You will not be executed during the moratorium period unless you have vacated or abandoned your property, “said Sara Singhas, director of loan administration for the Mortgage Bankers Association.