How Homeowners Can Protect Their Investment | Bakersfield life
The impact of COVID-19 has been quick and unexpected, leaving many people in dire financial straits. In fact, a recent study conducted by OnePoll in conjunction with the National Association of Realtors found that 71% of homeowners are worried about not having the mortgage relief options out there. Although mortgage relief options are available, 57% are skeptical of the mortgage relief options that are available. Additionally, nearly three in four say they do not fully understand the effects or ramifications of the various mortgage relief options available.
The effects of COVID-19 have led some owners to take desperate measures to ensure they can protect their investments. The reality is that there are relief options available that most homeowners are unaware of (including the CA Mortgage Relief Program), and the sooner the homeowner can talk to a lender or realtor about alternative payment plans, the less stressful the financial situation will be.
Here are some areas that can be addressed when talking to a real estate agent or lender about your financial situation and investment protection:
• Repayment plan. If you can’t afford to be reinstated, but can start making payments to catch up, the lender may allow you to pay an additional amount each month until you are caught up.
• Loan modification. Your lender may agree to modify your mortgage. Options include:
— Adding all missed payments to the loan amount and increasing the monthly payment to cover the largest loan.
— Giving you more years to repay the loan, lowering the interest rate and/or canceling part of the loan to reduce your monthly payment.
— Switch from a variable rate mortgage to a fixed rate mortgage, so that you are not exposed to increases in your monthly payments.
— Require that amounts for taxes and insurance be included in your monthly mortgage payment, to avoid large bills on top of your mortgage.
• Other options with a lender. Talking to the lender or “loan manager” who collects payments should be one of your first steps. Other options to discuss include:
– Tolerance. Lenders may allow you to make a partial payment or skip payments. You will be required to repay any missed or reduced payments in the future. Forbearance does not erase what you owe.
— Reintegration. Reinstatement is when you make a payment that covers all of your late payments, usually at the end of a forbearance period.
California Mortgage Relief Program
The California Mortgage Relief Program will fully cover up to $80,000 per household for those approved, paid directly to the loan servicer. It uses federal homeowner assistance funds to help homeowners catch up on their housing payments. The program is absolutely free and funds do not need to be refunded. The California Mortgage Relief Program is part of the state’s Housing is Key initiative.
Those eligible for assistance include California homeowners who faced pandemic-related financial hardship after January 21, 2020 and were unable to pay their mortgage, if these residents:
• are also equal to or less than 100% of their county’s regional median income;
• be the owner of a single-family residence, a condominium or a permanently fixed prefabricated house;
and meet one of the following qualifications:
• receive public assistance,
• are overloaded with housing,
• or do not have other mortgage renegotiation options through their mortgage manager.
If you are a homeowner who is struggling or unable to meet your loan obligations, you can also work with housing experts and your lender to find a solution now. Don’t wait until you’re behind to ask for help. Acting quickly can help you keep your home and the money you’ve already invested in it.
Realtors may also be able to help you find responsible lenders who offer fair and affordable loans. Visit www.bakersfieldrealtor.org to speak with a local realtor to learn more.
Anna Albiar is the 2022 President of the Bakersfield Association of Realtors.