Your Mortgage and the Coronavirus

So many people throughout the United States and throughout California are impacted by COVID-19, the coronavirus. Many homeowners like yourself are probably full of questions, worries, and concerns about mortgage payments in light of the Coronavirus situation.  We hope that we can help you alleviate some of your fears discuss some of the options available to you with respect to your California mortgage and the coronavirus.

During the previous economic downturn, our full-service real estate brokerage and property management company helped thousands of homeowners who were in financial distress to identify the best solution with respect to the challenges they faced in making mortgage payments.

Many people are struggling financially right now and may have a hard time paying their bills as a result of layoffs or shelter in place orders across the United States. Know that you are not alone. All of the experts, myself included, say that it is extremely important that you pick up the phone and call your mortgage lender.

 

 

When you call your lender to ask for help, you really just need to tell them your story. Many lenders have situations and plans in place for disasters already—such as hurricanes, wildfires, and terror attacks. And, now, unfortunately, the coronavirus will be added to that list. Relief is out there already from many of the big banks, such as Chase, Citibank, Wells Fargo, and Bank of America. And, according to the news reports, 1000s of additional lenders are beginning to follow suit.

You are probably hearing all sorts of things in the news, and of course, this is all changing day to day and even hour to hour. 

 

If you are falling behind or will fall behind on your mortgage, it is important for you to understand your options.

The first option is to Do nothing. You can cease to make payments without making any arrangements, but this is generally inadvisable.

The second option is Forbearance.  A forbearance agreement is an agreement you make with your lender that will allow you to defer a set number of payments.

The third option is Loan Modification. A loan modification agreement is a renegotiation of your loan terms such as your interest rate, payment amount, or the length of the loan. It generally requires submission of paperwork that needs to be approved by your lender.

 

If, as a result of the pandemic, you see no favorable way out of your situation and you need to sell, there are a few different approaches.

The first is an equity sale. If you have equity in your home, even if you are behind on your mortgage payments, you can still sell your home. According to market research, people who sell their homes using a real estate professional see a home sale at up to $56,000 more than if they go it alone. So, from a data perspective, it does make sense financially to contact a real estate agent to assist you.

If you owe more to your mortgage lender than your home is worth, you can still sell your home at no cost to you. This would be done in a process called a short sale, where our staff arranges with your mortgage for a buyer to purchase your home at market value and have the balance of your mortgage debt forgiven. 

At Broadpoint Properties, we have helped thousands of distressed borrowers through financial challenges during the great recession using all of the options I’ve discussed. If you are struggling right now and worried about your next mortgage payment, it is our sincere hope that the information provided here will help you. If you or anyone you know needs personal advice with respect to their mortgage and the coronavirus, please do not hesitate to contact the team at Broadpoint Properties.