Sign Delaware Banking Forbearance Agreement Now

Industry sign banking delaware forbearance agreement now

all right guys so fhfa which is the conservator for freddie mac and fannie mae the handlers of all conventional financing announced that they are going to be extending all of their forbearances for three months which means that they're taking the program from 12 months to 15 months and the reason why that's such big news is because 600 000 americans were set to have their forbearances expire at the end of march and while quite frankly no one's really prepared for what will happen if that happens so we've now given ourselves a three-month extension homeowners need to think about what they're going to do are they going to maintain their properties are they going to revisit their budgets are they going to sell are they going to modify their loans and then if they are not in a position to be able to afford their current mortgage where are they going to go right and so what to do with this equity i mean there is so much to unpack here especially when it relates to you know just the overall housing market and what this means for future buyers so before i get into all of that though i am going to ask you to like comment and subscribe and maybe send this video on to friends and family who might find this information useful so i think it's a good place to start with just explaining this whole forbearance fiasco it wasn't really rolled out extremely well obviously because we were in times of prices but as somebody who works in the mortgage industry for a very long time literally almost two decades i can say without a doubt we were all caught off guard there's so many things that go on behind the scenes as it relates to mortgage insuring mortgage selling liquidity that have to deal with people's payments and so when the government announced the cares act and they announced that people were going to be able to defer their payments nobody was really prepared with how to roll that out for consumers and so all of this misinformation started happening and so the cfpb is currently investigating all of that now but some of the big complaints some of the big misconceptions were like big lumps on payments that were going to be due how long you could actually get a forbearance for if there were going to be penalties or negative reporting on credit and so um just in general to clear that up so initially they had talked about a three-month forbearance with this with an additional three-month extension and then a six-month extension after that after the three months there was supposed to be a lump sum payment but quickly they came to realize that that would really impact people's affordability and so it's a six-month initial forbearance period where you just defer mortgage payments to the end of your loan no penalties no questions asked honestly they just take the payments add them to the end of your mortgage and then you can apply for an additional six months after that so 12 months in total of deferred mortgage payments now what has happened is that some companies you know didn't process forbearance very quickly so certain people were ending up getting negative reporting on credit they didn't get forbearances right away and so that had a negative penalty then the opposite occurred where people would call in just for information about a forbearance and then be placed on a forbearance without their knowledge uh without them wanting to be on forbearance so that created some additional issues um then there were not every loan qualifies so in order to be qualified for forbearance under the cares act you actually have to be a government-backed loan either through fannie mae freddie mac uh fha va and if you weren't if you were a jumbo loan or a non-qm loan i mean honestly it was up to the lender on whether or not they were going to provide that um and so the reason that we're now seeing this three-month extension right is because despite all of the craziness that ensued with the rolling out of forbearances 2.7 million americans applied for the program and are currently on forbearance and 600 000 of them were set to have their forbearances expire at the end of march so obviously we're not you know completely recovered economically in fact far from it even though unemployment has gotten better and we're still seeing lots of improvements we're just nowhere close to where we were february 2020 and because of that the government is still concerned about affordability and this three-month extension on forbearances is meant to hopefully delay or prevent people from going into foreclosure so i want to talk about what your options are if you are somebody who has had a dramatic reduction in income if you are now super in debt because of a you know a furlough or because of you know life and and things that have happened in coronavirus what can you do to set yourself up for success using this next three months as an extension so i want to talk to you about what happens before your forbearance expires so about 30 days before your forbearance expires your servicer so the place that you make your payments to will be reaching out to you about your repayment terms now there's three different repayment types aside from like selling or refinancing so i'm gonna talk about them but just know that you know you aren't required to do any of them aside from resuming your monthly payments okay so the very first option is to make a lump sum there's been so much confusion on this so i just want to be super clear you are not required to make a large lump sum payment okay it is going to be one of the options that is presented to you so um if you're planning on selling or refinancing obviously you're gonna reinstate your loan right that happens with just the payoff uh but if you had like let's say a large cash windfall got a large bonus or you got you know deferred commission right you can elect to do this so that it doesn't uh tack on to the end of your mortgage now the other repayment plan is going to be a loan modification and so this is just where they modify all the total loan payments and then they tack on just an additional amount from the payment that you used to make to make up some of the deficit so just know that that's one option you can always just resume your original mortgage payments i think most people are choosing that one but just know that when you do like a partial loan repayment or you modify the total loan or you go back to making mortgage payments if you are applying for another mortgage so another purchase a refinance or a cash out refinance especially that there's going to be additional guidelines that apply to your qualification because you did a forbearance and it is super super important that you check with the loan officer on what those are but typically lenders want to see that you've either reinstated or that you've had several months of paying whatever payment repayment plan you've chosen all right so i want to talk to all the people that are currently still experiencing financial distress of any kind have gone in and over their head with debt because of everything that's happened this last year if you own a home chances are you are positive equity i mean almost every homeowner in the last year experienced double-digit appreciation with their home values and so sometimes when we own an asset in order to get ahead we have to take a step back by selling so that we can get ourselves out of debt put money in our savings and then expand our bandwidth for our budget and so i'm talking to you because of personal experience um when i was about 20 years old my dad actually let his property foreclose and it actually did have equity in it and he it happened because he was too embarrassed to say that he couldn't make the mortgage payment anymore and we found out after the house had already gone to auction and they just they don't try to sell your house for maximum dollar they're just trying to get it off their books and so unfortunately my dad lost all of that equity and it was really devastating for our family because he could have used that money to put himself into a better housing situation that was more affordable but instead all of us had to band together scrape up any kind of money that we had to be able to help him out financially it was demoralizing for everybody i mean honestly um it's probably one of the most traumatic things i've actually lived through and so i tell you this because like it stinks to have to become a renter and there's going to be so many of you who say well rents are you know incredibly high right now and that is true but the thing is that paying a mortgage you can't afford with all of the debts you also can't afford isn't doing you any favors and so taking that equity paying off your debt allowing yourself to be able to afford even a higher rental payment and putting money in your savings for the long haul i promise you is the right decision there is going to be another market for you to become a homeowner in and i don't know if it's 21 or 22 truthfully but there is going to be a time when there is more inventory on the market because of building because of expansion because you know the aging community is starting to sell their properties off or people decide to sell so i promise you there will be another market for you and yes there might be higher interest rates but i promise you when there's a correction prices will go down now i'm not saying that there's going to be a housing crash i'm just saying that there's going to be another time for you to re-enter the housing market and you know my best advice to you is that if your housing is exceeding you know i mean for sure if it's exceeding 50 of your lifestyle budget you should consider selling but if you're unable to you know pay debt and save at the same time you should also think of what your options are for selling um it definitely would be something that i would do and you know i say that with like all humility right sometimes we have to slow down to speed up so if you have questions on what that looks like for you in terms of budgeting or you know does it make sense for you to sell your house right i'd be happy to answer questions the other thing you might want to consider is what it looks like to refinance to maybe get a lower interest rate um or to you know invite people to live in your house maybe there's a spare room that you can live or that you can rent out right if there's ways to you know save your home ownership by you know being resourceful and scrappy by all means do them too but look into what those options are and make sure that they're in line with your budget you can always find our smart steps budget on my website i'll put a link in the description below but i say this to you because i really want you guys to just be overall successful with money in general so again guys if you have any questions on any of the things that i reviewed in today's video if you have questions on forbearance how you qualify your budgets you name it go ahead and post them below i love to answer them all and it means a lot to me that you tune into this channel so until next time guys i will see you on another money tip video you