Many people are concerned about how they will pay their mortgage as jobs are lost and incomes decrease.  As mentioned in a previous post, a borrower’s level of protection depends on the investor/owner of your loan. If it is owned or backed by the federal government (such as FHA, VA, or Fannie/Freddie Mac loan) there should be options to enter into a forbearance plan where payments can be postponed without penalty. At the end of the forbearance period, the loan should be permanently modified as needed.

            If the loan is not federally backed, the options for borrowers are much less clear. It appears that each loan servicer or investor will be making their own decisions about how to handle potential defaults.

            Any interaction with a mortgage loan servicer can be challenging or stressful, and that is especially true now. Even well meaning companies may be overwhelmed by the number of people seeking assistance and make mistakes in how they deal with each situation. These mistakes could have huge consequences for people and lead to potential foreclosure actions in the future.

            The best thing to do under these circumstances is to be prepared and persistent in communications with your loan company. Make sure you clearly explain how the COVID crisis has caused you economic hardship and be prepared to substantiate these hardships in writing if needed. Always make notes for each phone call, recording the date of the conversation, which person you spoke with and the details of the conversation. You should also save all correspondence you receive in the mail, especially statements and letters. If the company fails to properly assist you, this information will be very useful to an attorney if you do eventually need to take legal action to protect your interests.