COVID-19 And Your Clients’ Mortgages: FAQsDuring these challenging times, our top priority is the health and safety of our partners, our partners’ clients and our communities. We’re finding new ways to deliver the mortgage experience your clients deserve while keeping everyone safe.
We also know there are a lot of messages coming from many different sources that make it a bit hard to know what to do next. We know that as a dedicated broker, you want to be transparent with your clients. We’ve created this FAQ resource to give you certainty and provide clear answers during these times.
Mortgage AssistanceWhat does my client do if they can’t make their mortgage payment?
If COVID-19 has impacted your client’s ability to make their mortgage payment, they qualify for a forbearance, which is a way to pause a mortgage payment without damaging their credit.
What is a forbearance?
Forbearance is an assistance program that pauses your client’s mortgage payment. At the end of the forbearance plan, your client will to need to pay the past-due amount, apply for other options or extend the forbearance period. This will not affect your client’s credit. If your clients want more information about applying for forbearance, you can direct them to contact their mortgage servicer.
When should my client apply for a forbearance?
The right time for your client to apply for a forbearance is when they are no longer able to make their mortgage payment. We recommend your client waits until they can’t keep up with their current mortgage payment. That way, the forbearance will help them in the months they need it most.
Are there different assistance options based on the type of loan?
No. Whether it’s a conventional, FHA, VA or USDA loan, your client will be eligible for a forbearance.
Will my client’s credit be affected if they get a forbearance due to COVID-19?
If a client gets a forbearance because they’ve been impacted by COVID-19, here are important details:
- If your client was current on their payments as of January 31, 2020, their credit won’t be affected by the forbearance – we’ll report the loan as current.
- If your client wasn’t current on their payments as of January 31, 2020, they’ll still get credit protection from the forbearance. Payments that are paused during forbearance won’t be reported as late. However, payments that were reported as late prior to January 31 will still show up as “late” on their credit report.
At the end of forbearance, your client needs to pay the past-due amount. The quickest way for your client to get back on track is to pay the past-due amount in a lump sum. However, not everyone will be able to do that. Here are some other options if your client is unable to pay the past-due amount:
- Apply for a repayment plan. If approved, they’ll be able to pay a portion of their past-due amount each month in addition to their regular mortgage payment.
- Apply for a loan modification. If approved, the terms of their existing loan will be modified to include their past-due payments to help your client get back on track.
It’s also important to note that your clients have the option of paying whatever they can during the forbearance; this will make the amount they owe at the end of forbearance more manageable.
The forbearance lasts for 3 months. What if my client needs more time to catch up?
At the end of the plan, they’ll have the option to extend the forbearance. This may be a good option if they need more time before getting back on track with their payments.
If your client extends the forbearance, they’ll still need to bring their loan current when their plan ends. That means making all the payments that were paused during forbearance, plus any payments that were past-due before the plan began, if applicable. An extended forbearance means a larger amount they’ll need to bring current at the end of the plan.
In-Process Home Purchase And Refinance ClientsMy client has a home purchase or refinance in progress. Will they still be able to close?
Yes! Even though shelter-in-place and stay-at-home orders are in effect across the country, we’re finding new ways to deliver the mortgage experience your clients deserve while keeping everyone safe. Learn more about how we’re handling shelter-in-place orders, appraisals and closings.
Can an appraiser still visit a property?
In many cases, there are alternatives to in-person appraisals. We recently expanded the availability of appraisal alternatives like property inspection waivers, off-site valuations and drive-by appraisals. This replaces the in-person appraisal requirements on many loans.
For instances where in-person appraisals are still required, we’re working with appraisers to ensure that no one is conducting an appraisal who shouldn’t be – based on their recent travel, interactions, health symptoms, etc. We’re ensuring that appraisers understand and follow all Centers for Disease Control and Prevention (CDC) guidelines and take proper sanitary measures the entire time they’re at a property.
But we also need everyone’s support. When the appraiser arrives, they’re going to ask to maintain a physical distance of at least 6 feet, and they will not shake hands with your client as they’re following CDC guidelines. They may even arrive wearing rubber gloves or a face mask as an added precaution.
The appraiser may even ask about your client’s health or recent travel. We respect everyone’s privacy and don’t need any personal details, but if your clients think they may be sick, or if they’ve visited an area with active outbreaks, please let us know so we can find a solution.
If my client lives in a shelter-in-place state, how do I help them close their loan?
Even though shelter-in-place orders are in effect in many areas of the country, the mortgage process can still continue. In some cases, a hybrid eClosing experience can be done virtually.
But in the event that an eClosing isn’t possible, we’re ensuring that closing agents follow all CDC guidelines and take proper sanitary measures the entire time they are at a property.