With so many people suddenly being thrust into unemployment due to the COVID-19 virus, I want to offer some sound financial advice and information on key resources that you may be able to access for temporary financial relief.
First, if you are facing even the potential right now of defaulting on a payment on any loan or credit card, DO NOT be afraid to contact your lender or financing company! I cannot stress this enough. The biggest mistake that I see people make during difficult financial periods is to just stop paying and ignore the problem.
I will tell you that nine times out of 10, if you are proactive and reach out to your financing agency or lender, they will be willing to work something out with you. They have incentive to work with you. If they don’t, they don’t get paid! I’ve seen so many communications from banks and lenders in the last week stating details on HOW they will work with consumers. They know that we’re facing a financial crisis right now and they know if they don’t work things out with consumers, their collections department will be overwhelmed in a short time and their bottom line will sink even more.
If you are worried about how you’ll be able to make your mortgage payment, contact your lender or servicing company. So many people I talk with don’t realize how the secondary mortgage markets work because there isn’t a lot of information about how it works. Once you get a mortgage loan from a bank or a mortgage company, they often sell your loan on the secondary market to a pool of investors who buy mortgages and service them. These include Fannie Mae, Freddie Mac, Chase, Carrington, and so many others. These then often become your servicing agency. You can look at your mortgage statements for see who your servicing agency is if you don’t already know and then contact them to work out a solution.
So many mortgage products offer mortgage payment deferment options, sometimes called forbearances or moratoriums. These can last between 30 days and six months, particularly if you can prove you are currently unemployed through no fault of your own. Right now, the mortgage servicing agencies know that is highly likely for more than of the American population.
I want to get specific for a moment. This newsletter goes out to hundreds of previous Pathfinder HomeOwnership Center customers who closed on their home with a USDA 502 Direct loan. If that is you, we are still here to support you. No matter how long ago you worked with us. If you need to talk with someone, feel free to reach out. My email address is [email protected]. My direct phone number is (260) 355-2557. I’m here for you and so is our entire team.
If you got a USDA 502 Direct loan and you’re afraid of having even one late payment, contact Central Servicing. They’re the agency who services and processes all loan payments for USDA 502 Direct buyers. Their phone number is 1-800-414-1226.
I have a close relationship with the National leadership at the USDA Rural Development offices in Washington. I have direct guidance from them on what our 502 Direct Customers can do. USDA can allow people not to make payments for six months at a time. This can be renewed for up to two years based on continued financial and employment information the homeowner gives to the USDA. At the end of the grace period, homeowners will have to begin making monthly payments again. The loan will be re-amortized, which means the deferred monthly payments will be tacked onto the end of the loan and payments will be slightly adjusted or loan terms could be extended. Those lost payments will still be owed to the USDA, but they will work it out so it’s not a huge burden on the homeowner.
If you are considering contacting the Central Servicing for USDA, I have guidance from USDA that homeowners need to be prepared for a long wait on the phone before talking with someone. It could be 20-30 minutes before someone can speak with you. They are getting a lot of calls right now.
Again, whether you have a USDA loan or are just thinking you need help from your credit card company or car loan lender, there are options. You just need to call them and explain your situation. DO NOT be afraid to call them. We all have enough to worry about right now with the concerns of this terrible virus.
If you have questions or feel like you could use some advice, I am making myself available as much as possible. Feel free to contact me directly. I am the Director of the Pathfinder HomeOwnership Center, but I am also certified and trained in Financial Coaching & HomeOwnership Counseling. And if I don’t have the right answers for you, I will try to help find the answer alongside you.
Take care of yourself and your family.