As the Corona virus pandemic continues to spread across the world, it's economic impacts are being felt by millions of Americans. While businesses shut down and workers are laid off, a record number of Americans are already filing for unemployment benefits.
According to the Department of Labor, jobless claims climbed to 3.28 million last week alone — this is the highest number of jobless claims in recent history, dwarfing the previous high of 695,000 claims filed in October 1982.
Due to this unprecedented impact on U.S. workers, many people are understandably concerned about how they'll afford their mortgage payments and other bills. If you're one of the people affected by these uncertain economic times, don't panic — many lenders are quickly making accommodations to help.
Government-sponsored mortgage giants Fannie Mae and Freddie Mac have both have ordered lenders to work with borrowers by suspending or reducing mortgage payments for up to 12 months. This is a much-needed reprieve for many homeowners.
If your loan doesn't fall under this category, don't fret, many other lenders are likely to set new policies that allow flexibility for borrowers. If you're concerned about making your loan and credit payments during this time, here are a few things you need to know.
If you don't think you can meet your loan repayments, the first step you must take is to reach out to your creditor. Many lenders are currently offering flexible ways to help borrowers who are in a financial crisis.
For example, PNC banks are offering a postponement of payments for up to 90 days, with no late fees, which includes; auto loans, mortgages, and credit cards — and Bank of America recently announced its customers would have the option to submit an online credit card payment deferral request.
The sooner you make your lender aware of your financial situation, the easier it will be to address — without adversely affecting your credit.
A mortgage modification is helpful for people who find themselves in a financial crisis. Some lenders enable borrowers to skip their mortgage payments for an agreed amount of time, and pay them back over the course of several months. Other lenders add the missed payments to the end of the mortgage, effectively extending the life of the loan when the lender is hopefully no longer facing financial hardship.
In addition, if you have a Freddie Mac or Fannie Mae–owned home, you'll be pleased to know that foreclosures and evictions have been halted until May 17, 2020 — plus any delinquent payments incurred will not be reported to the credit bureaus.
All major mortgage lenders are responding to the COVID-19 pandemic in different ways, so it's essential to reach out to your lender directly to find out how they can help you specifically.
For example, Chase Bank is offering borrowers a review of their loan to be considered for possible options, including a revised repayment plan, loan modification, or forbearance. Customers of Bank of America can expect a pause on all evictions, foreclosure sales, and repossessions. They also state that they are actively working with customers to find solutions to their financial difficulties. Wells Fargo and TD Bank currently have established forbearance plans in place for customers who are facing financial hardship. Both banks are encouraging customers to reach out to them directly and discuss their options.
If you're concerned about meeting your loan payments during the Corona virus pandemic, it's crucial to take action now. Each bank and financial institution has different requirements and options for their relief programs, so you should check with them directly.
In these trying times, it's essential to stay patient, stay positive, and stay safe.
https://www.dol.gov/ui/data.pdf, https://www.fanniemae.com/portal/media/corporate-news/2020/covid-homeowner-assistance-options-7000.html, http://www.freddiemac.com/about/covid-19.html, https://www.chase.com/digital/resources/coronavirus/mortgage, https://homeloanhelp.bankofamerica.com/en/forbearance.html, https://www.wellsfargo.com/mortgage/manage-account/payment-help/forbearance-plan/, https://www.td.com/us/en/personal-banking/