Stimulus Update: COVID Mortgage Relief Ends Soon – What Are Your Options?

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Mortgage assistance programs designed to help financially strapped Americans weather the COVID-19 pandemic have expired or will expire soon, putting hundreds of thousands of homeowners at risk of losing their homes. However, those who fear making their payments without the help of the federal government still have other options – and now is a good time to explore them.

See: 15 mortgage questions to ask your lender
Find Out: Should You Refinance Now With Low Mortgage Rates?

The federal government, along with major banks and mortgage services, implemented emergency mortgage bailout programs in the early days of the pandemic. Under these programs, millions of homeowners have been allowed to skip payments for 18 months, CNBC reported.

According to data from Black Knight, an analysis and software company, more than half of the 7.7 million borrowers who took advantage of mortgage bailout programs are now up to date with their mortgages and re-making their payments. Almost a quarter (23%) have sold their home or refinanced their mortgage to reduce their monthly payments.

But with the end of these programs, many homeowners are in dire straits. About 264,000 homeowners became delinquent on mortgages after their programs expired, CNBC noted, and 38,000 are in active foreclosure.

Related: How Many Mortgage Payments Can I Miss Before Foreclosure Happens?

As GOBankingRates previously reported, a total of 45,517 U.S. properties were subject to foreclosure reports during the third quarter – including notices of default, scheduled auctions, or bank foreclosures – according to a report by ATTOM, a mortgage data company. This is an increase of 34% from the previous quarter and 68% from the previous year.

But for many homeowners, there are other options that may allow them to keep their home. A good first step is to contact your mortgage agent to see if it is possible to refinance or modify your loan. Traditional refinancing can help you save money if you can qualify for a lower interest rate.

Likewise, a loan modification can lower your monthly payments by extending the loan term or lowering the interest rate. This is a particularly good option if you have an income, but can’t afford the amount of your mortgage payments before COVID.

“If you expect to have trouble making a payment, contact your server immediately,” Michael Fratantoni, chief economist for the Mortgage Bankers Association, told CNBC. “The sooner you get in touch with your mortgage lender, the more options you have. “

Another option is to turn to the Treasury Department’s Homeowner Assistance Fund, which was part of the US bailout. The fund provides nearly $ 10 billion in aid to the country’s most vulnerable homeowners. Programs are implemented by individual states and territories and may have different deadlines and rules depending on where you live. But in many cases, you will be able to make up for missed payments.

Check Out: Housing Trends: Two-thirds of US Home Sellers Plan to Sell Within Six Months, New Survey Finds
Explore: The 20 Hardest Places to Sell a Home

At the very least, you can still sell your home – and now is a good time to do so. Home values ​​in the United States are expected to increase by almost 14% between October 2021 and October 2022, according to the latest projections from Zillow Research. This is in addition to an expected gain of 19.5% for all of 2021. RealtyTrac estimates that about 87% of foreclosed borrowers now have positive equity in their home.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held positions with Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. Her work has also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal, and Business North Carolina magazine. He holds a BA in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting has been recognized by the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story “Saint Christopher” placed second in the Writer’s Digest 2019 short story competition. Two of his short stories appear in With One Eye on the Cows, one anthology published by Ad Hoc Fiction in 2019. His first novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.


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