Hank Investigates: Forbearance Mortgage Assistance

(WHDH) — Millions of people who hit hard times during the pandemic reached for a financial lifeline to stay in their homes. But soon that relief may be ending. 7’s Hank Phillippi Ryan reveals why now is the time to act.

The closets are empty. The shelves are bare.

“This is mostly what was in the living room,” Fernando says.

Fernando is packing his family’s belongings for a move they didn’t plan on making.

“It’s hard to say goodbye,” Fernando says.

He lost his job as a financial executive last year and could not afford to pay his mortgage.

“I have spent a lot of sleepless nights,” Fernando says.

He called his lender and asked for a forbearance, a financial lifeline that allowed him to postpone making mortgage payments for several months.

But as the pandemic stretched on his forbearance ran out. Fernando still didn’t have a job and now he owed 16-thousand dollars for those delayed mortgage payments.

“It’s emotional,” Fernando says.

Millions of homeowners like Fernando made forbearance deals with their banks because of COVID. And for many the pause on their payments is running out soon. So, they need to figure out how to pay that money back!

“If your loan is in forbearance, it doesn’t mean it’s forgiven?” Hank asked

“No, it’s not forgiven. You’ll have to pay either now, later, or at the end of the loan. You’ll have to pay at some point.”

Nathalie Kallab Racimo, a homeownership and financial services counselor with the Neighborhood of Affordable Housing, Inc. (NOAH) says.

Fernando decided his best option was to put his Methuen home on the market and use the money from the sale to pay off his missed payments and the rest of his mortgage.

“You always want to leave your house on your own terms as opposed to having to leave,” Fernando says.

But selling isn’t your only choice. Experts say you can call your lender and negotiate a few different options.

  • You can ask to have your forbearance extended.
  • You can request that your missed payments get added to the end of your mortgage, but not paid in one lump sum
  • You can try to work out a new repayment plan or a loan modification, so you pay what you can afford.

The bottom line, you have to do something.

“So, if you do nothing when your forbearance is over, and you still can’t pay, the bank could foreclose?” Hank asked.

“If you don’t do anything else, likely you’re just going to lose your home and that’s going to be just life-changing and it’s going to be devastating,” Nathalie says.

Fernando is grateful his home sold quickly. When the deal closes, he’ll be able to make up his missed payments, pay off the rest of his mortgage and have some extra money left.

And he’s found a temporary place for his family to live while he keeps looking for work.

“Hopefully there are better things to come,” Fernando says.

If your forbearance is ending soon, don’t panic. There’s a lot of free support available, including counselors who can help you, and financial aid to assist with your mortgage payments. And if you have a federally backed mortgage you have some extra options.

For More Information:

Neighborhood of Affordable Housing (NOAH)

Nathalie Kallab Racimo

NOAH, Homeownership and Financial Services Counselor

Email: nkallab@noahcdc.org

Consumer Financial Protection Bureau, (CFPB):

Mortgage relief options and protections

Information from the state of Massachusetts, Mass.gov: 

Preventing Foreclosure 

US Department of Housing and Urban Development:

Find a HUD certified housing counselor to discuss your case and options

Berkshire County Regional Housing Authority

Advice from the United Way network

If you are falling behind on payments, get advice or help. Don’t ignore the problem.

Don’t panic. Foreclosure is a process that can take six months or longer. Immediately reach out and get help, but don’t vacate the property.

Contact the lender: Ask about options for modifications or forbearance. When you do contact your lender, make sure you take notes on your conversations and discuss all your options. If you feel like you are getting nowhere, you can always escalate your case.

If you need help, it is available. You can access a  Foreclosure Prevention Program. NOAH, for example, has regular foreclosure prevention and mitigation workshops accessible to folks across the Greater Boston area with a very high rate of positive resolution.

If you are having difficulty paying your mortgage and are an owner-occupant of a 2 or 3 family house, the Covid Eviction Legal Help (CELHP)  program will provide you with legal assistance. You can assist your tenants in accessing rental assistance to pay their back rent, which will help you pay your mortgage.

Access financial assistance: Homeowners can be eligible for assistance programs up to $4,000 (depending on what program they qualify for, based on income.)

RAFT (Residential Assistance for Families in Transition) is for households making 50% of Area Median Income (AMI).

ERMA (Emergency Rental and Mortgage Assistance)  covers folks up to 80% of AMI, both are state-funded programs.

Additionally, some city/towns have assistance programs that may support you. Call 211 to get connected.

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