CARES ACT and Homeowner Assistance Programs

The CARES ACT and homwoner assistance programs was inacted at the begining of the Pandemia in March 2020 and of this blog we’d like to first and foremost hope you and your family are safe and healthy, surely and slowly looks like we’re going back into some kind of normalcy, perhaps by the time you’re looking at this we’ve emerged from it, in any case,   I’ll bring you four ways provided by the cares act and homeowner assistance programs designed to help homeowners in need due to a crisis and in some cases provide individual help as well.

Here are four programs that can be utilized to assist homeowners that are in need in these times of crisis as provide by the CARES ACT in its homeowner assistance programs provisions. The first one is:

 
Forbearance.

Forbearance is basically an agreement between the homeowner and the lender. The lender agrees to reduce or delay payments for a set period of time, typically three to six months and they can extend that if the conditions are still the same. The only thing with this one is at the end of the period, all the money is due.

Modification.

Modification is more of a legal process by which the lender, changes the terms of the original loan, For example, if you have a 30 year fixed rate on your original mortgage, they might change it to 40 years, hopefully with the same interest rates or lower provided that you qualify and therefore the payments are going to be lower and more sustainable.

Please note; the first thing that you should do is look at your statement and see who the customer service is and what their number so you can call them up and see what the requirements and conditions are, and of course before you stop making your payments. Obviously if you can still pay, you should always pay.

Deferment.

Deferment is, is a way by which the lender deferred, stop or reduce the payments payments for a set period of time. And what they do is they tackle or add all the money that you will owe at the end of the set period into the backend of your loan. For example, if your loan is at $200,000 principle  and you owe them $15,000 or $20,000 as a result of stopping the payments, then they add that to the total amount.

The good thing about this is that you don’t have to worry that at the end of the set period that all this money is now due.

Payment Assistance.

The payments assistance program  allows you   to pay in installments the money that you had at the end of the forbearance and spread the amount owed over a longer term or through the end of the loan, be mindful that forbearance and deferment are used interchangeably, but they’re different.

Cash Out Refi or HELOC’s

Cash out refinance or home equity lines of credit might be the option if you have enough equity in the home and have the capacity to still qualify for a new loan (still employed, credit and some reserves or savings perhaps) therefore allowing you to pay for debt incurred.

Due to the crisis, there’s an unprecedented rate of unemployment and many small business according to the experts estimates over 100,000 won’t be able to continue operating.
Please remember that your servicer might not necessarily be the original lender of your loan and  home  loans are usually owned by institutions or investors and not necessarily the bank or servicer you that you get the statements from is the one that actually owns it and each investor might have different requirements and conditions, so you should first contact them to know what to adhere to.
Thank you very much. If you need anything else, feel free to refer to us, please call me/ text me or email me.

Bottom Line

This COVID-19 crisis has been a sudden event that have impacted just about everyone’s live and many of us need assistance to recover from the economic impact from the Pandemia and some of these option might help, feel free to call me if I could assist you or anyone you know who might benefit from any of these programs.