April 13, 2020
Are you having trouble making your FHA home loan payments? Is the coronavirus emergency made it financially difficult to stay current on your mortgage loan? There have been a variety of relief measures proposed and announced, but many of them are more general types of assistance.
The FHA and HUD published an announcement discussing COVID-19 related mortgage relief for FHA borrowers affected by the coronavirus outbreak. This relief is specifically for those with mortgage loans guaranteed by the FHA including mortgages, reverse mortgages, etc.
These measures were a welcome development for many FHA mortgage borrowers, but it is crucial for home owners to understand that until you contact your loan servicer, you cannot assume it’s safe to delay payments.
You MUST make arrangements with your lender to claim the mortgage relief offered. What can you expect when you call your lender? Here is what the FHA and HUD have announced:
FHA Borrowers unable to pay their mortgage due to the COVID-19 National Emergency are eligible for up to six months of loan forbearance.
FHA Lenders must provide an additional six months of forbearance if requested by the borrower. They also have the option of delaying Due and Payable requests for Home Equity Conversion Mortgages by six months. HECM borrowers may also qualify for an additional six-months but in such cases, HUD approval is mandatory.
There is an additional measure in the form of the COVID-19 National Emergency Partial Claim, which should be used by FHA lenders “when the COVID-19 forbearance period ends”.
The partial claim option helps homeowners granted special COVID-19 National Emergency forbearance “to reinstate their loans by authorizing servicers to advance funds on behalf of homeowners. “
The FHA Partial Claim program works by deferring repayment “of those advances through an interest-free subordinate mortgage that the borrower does not have to pay off until their first mortgage is paid off” according to the HUD press release.
These temporary relief measures are meant to help borrowers save their homes from FHA loan default and foreclosure.
Call your loan servicer to learn how to apply for these economic relief measures associated with FHA home loans. Remember, do NOT skip or delay payments without discussing such steps with your lender. Skipping payments without making arrangements puts you in danger of loan default.
If you have already missed a payment, contact your lender immediately–the more payments you miss, the fewer and less flexible your options become to save your house. Don’t lose your house because you failed to make the phone call.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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