Mortgage Forbearance During COVID-19: What Long Island Residents Should Know
In addition to the disastrous health impacts of COVID-19 on Long Island, the financial effects have also been profound. Many Long Island residents are currently out of work or working significantly fewer hours than they typically would.
As a result, many Long Islanders are struggling to pay their bills. The federal government has been taking action to help ease some of the financial burden caused by the COVID-19 pandemic, specifically through the CARES Act. One of the relief measures included in the CARES Act is the option for mortgage forbearance.
Mortgage Forbearance under the CARES Act
Borrowers with federally backed mortgages can request forbearance for up to 180 days. The servicer can provide an additional 180-day extension at the request of the borrower. To take advantage of the forbearance, borrowers will need to contact their mortgage servicers. The borrower must attest to the servicer that their financial hardship is directly related to the coronavirus pandemic. The CARES Act requires the servicer to offer forbearance.
Requesting Mortgage Forbearance
The CARES Act mortgage forbearance is not automatic – you will need to contact your servicer. If you’re unsure of which company services your mortgage, check your monthly statement. You’ll then need to find out if your mortgage is backed by the federal government. Your servicer can help you find this information. Your servicer will ask questions about your current financial situation, including information about your income, expenses and assets. If your financial hardship is related to the coronavirus pandemic and your mortgage is federally backed, you have the right to ask for the 180-day forbearance. Be sure to document any agreement you come to with your servicer and store the records in a safe place.
Important Caveats about Mortgage Forbearance
The CARES Act is clear about allowing for forbearance on federally backed mortgages. What it’s not clear on, however, is what happens when that forbearance ends. Therefore, individual servicers are determining their own rules. Some servicers are asking for a “balloon” payment once the forbearance is over, meaning the borrower would have to pay all of their missed payments in a lump sum. For some borrowers, this may be impossible. Other options servicers are using to make up for the missed payments include adding a fraction of the missed payments to your monthly payments over a certain period of time or adding your missed payments onto the end of your loan term. When you call to request forbearance, ask your servicer how they’re handling the missed payments. Consider whether that method is worth it for the forbearance now.
How Long Islanders Can Get Help
For Long Island residents struggling to pay their mortgage, seeking forbearance can be confusing and overwhelming. Seeking professional help can allow you guidance in navigating the daunting process and determining what options are best for you. Leslie H. Tayne, Esq. and her team at Tayne Law Group, P.C. in Melville, N.Y., are offering free phone or virtual consultations during this time. Extended evening and weekend hours will be offered to accommodate clients’ schedules.
The consultations are designed to provide assistance to those struggling financially as a result of the COVID-19 pandemic. In addition to guidance on mortgage forbearance, the financial professionals at Tayne Law Group can work with individuals and small business owners with budgeting guidance, resources for paying bills, avoiding bankruptcy or mounting debt, and assistance with discussing relief options with creditors. The team at Tayne Law Group will work with you to find the best solutions tailored specifically to your situation. Visit taynelawgroup.com or call (866) 890-7337 to get the help you need.