Many borrowers whose mortgages went into forbearance at the start of the pandemic are now experiencing expired protection. Fortunately, there are various options to consider when resuming your mortgage payments.
How does the mortgage moratorium work?
The pause in mortgage payments during the COVID-19 pandemic under the U.S. Government’s Cares Act is called a forbearance, which is a temporary postponement of mortgage payments. The U.S. government created this program to allow homeowners to stay in their home during the pandemic and prevented mortgage companies from foreclosing on anyone behind on payments. It is important to understand, however, the foreclosure moratorium is not payment forgiveness. In other words, homeowners still owe the full mortgage payments.
Getting stressed about what happens next? If you haven’t made any payments since COVID started, you might be feeling a little bit worried about what you owe.
Now that the foreclosure moratorium has ended and the requirement for monthly payments has resumed, homeowners may be struggling to chip away at accumulated back-payments, on top of their regular monthly mortgage. And the pressures for timely payments have returned as mortgage companies have resumed foreclosure rights on delinquent homeowners.
What are options for homeowners who took advantage of the foreclosure moratorium and now find themselves unable to make their monthly payments?
Communicate with your mortgage lender
The first option is to reach out to your mortgage lender and find out if they offer any other programs to help establish a payment that meets your budget. It’s important to remember, most mortgage companies don’t want to go into the foreclosure process. The entire process is expensive, and time consuming for lenders to take ownership of the home and begin to find a new buyer.
Foreclosure can take at least six months. So the lender might be open to discussing what repayment options are available, including potential adjustments to the payment amount or the length of the loan, or both.
List Your Home For Sale on the MLS Market
If reaching out to your mortgage lender to discuss repayment options to avoid foreclosure doesn’t work, you can list and sell the property with an agent utilizing the standard MLS system and listing process.
Selling your home can be a good long-term strategy to get out from under your owed mortgage payments. But remember, you will still owe your mortgage payments while your house is on the market, in the sales process, and in the closing process. As of November 2021, the average home sat on the market for 22 days, with the average time to close at 49 days. That’s 71 days from listing to closing, on average. It could take your home much longer to sell, and you’ll still be accountable for mortgage payments during this time frame.
Sell your home to an all-cash buyer
Finally, if you prefer to simplify or accelerate the sale of your home, an all-cash buyer can be an ideal solution. If the mortgage moratorium has left you struggling to make mortgage payments, selling your home to an all-cash buyer can save on closing costs and appraisal fees, as well as the time it takes to sell and close.
We would love to help! HouseMax has been the “Homeowner’s Problem Solver” for over 10 years. We have worked extremely hard to maintain a sterling reputation, as evidenced by our great rating from the Better Business Bureau and our strong, consistent Google reviews.
HouseMax can quickly evaluate your home, make a fair, generous offer, and close on the sale of your home in just 30 days, and avoid foreclosure altogether. In addition, beyond the actual sale of your home, we would be happy to help secure movers, storage, disposal services, landscaping services or whatever may be needed to help complete a stress-free home selling process. We’re here to support you and make the process as painless as possible, so your mortgage payments are no longer a source of stress.
If you are interested in learning more, please give us a call today, or complete our easy form to get the process started!