During the Covid 19 pandemic homeowners were able to apply for the mortgage forbearance. You had two options; either to stop your payments for the time of the pandemic or reduce your payments. It all depended on individual situations and mortgage lenders options. Modern Times Homes did their own research, and this is what we found out how this could impact your credit history for the future.
We still believe that mortgage forbearance was an awesome resolution to the financial problems people faced during the Covid 19 pandemic. There were many people that lost their jobs and were unable to make their monthly payments. For those people it was one way to relieve their stress while figuring out their financial situations. The way our lives changed during the last two years will be unforgettable; but at Modern Times Homes we believe that what doesn’t kill us, will make us stronger. We have to believe that better days are on their way.
When exciting forbearance the most important goal for the homeowners should be avoiding foreclosure. The process of foreclosure is not only emotionally damaging but also financially. Foreclosure can have 100 plus points drop on your credit score, which will make it look really bad when trying to purchase a new home, rent or even apply for new credit. This would have a huge impact on your future.
“To help homeowners avoid foreclosure, the Consumer Financial Protection Bureau issued a rule in place that will require lenders to follow three steps before starting a foreclosure, which include:
- The loan servicer must review a loss mitigation application submitted by the borrower that shows the borrower’s financial and household information, which can help the lender determine next steps.
- Loan servicers must follow state and local laws to verify that the home has been abandoned before proceeding with a foreclosure.
- Loan servicers must make a diligent effort to contact the homeowner before going forward with the foreclosure. Foreclosure is allowable in the event homeowners are a minimum of four months behind on their mortgage and have been unreachable for more than 90 days.” Forbes.
Once the forbearance will end you will have couple of options to pay it off:
- Repay what you own in one big payment
- Sum up what you own divide it into payments, and add it to your monthly mortgage payment
- Or Resume your regular monthly mortgage payments and put the missed payments at the end of the loan
It all depends on what your lender will let you do. The best way for you to find out would be contacting your lender and figure it out with them ASAP.
Another option to avoid foreclosure would be selling your house. If you know that your financial situation will not stabilize for another couple of months it is better to sell the house, maybe find something smaller (that you could afford) or maybe rent something for a year or two until you will stabilize your financial situation.
If you want to sell your house fast for cash and avoid foreclosure, give us a call at 847 242 2212. Modern Times Homes is buying and selling properties in Illinois for quite some time, and we guarantee hassle free transactions. No closing cost and no realtor commissions.