Foreclosure – what you should know.

Foreclosure happens when homeowners are unable to make mortgage payments, and a lender takes ownership of the property. Unfortunately, many homeowners have found themselves facing foreclosure due to financial hardships brought on by COVID-19. 

Most foreclosure processes begin anywhere from three to six months after the first missed mortgage payment, but even once that process has started, there is still time for the borrower to work with their lender. Every state has different foreclosure laws, and Tennessee’s can be found here.  

Throughout this period of national emergency, the federal government has offered several mortgage relief options for FHA-permitted borrowers. One of those options is forbearance, or the temporary hold on house payments for a six-month period, with the option of extending the period an additional six months if requested by the borrower. While private mortgage lenders are not required to provide these options, many are offering repayment options if lenders can demonstrate financial hardship because of COVID-19. United Housing can help you navigate plans with your lender.

Forbearance is not payment forgiveness, as all mortgage payments owed must resume being paid in full at the close of the forbearance period – however, no lump sum payment is required. While these types of relief programs do exist, it is still in your best interest as a borrower to continue to pay your mortgage if you are able to. If you find yourself back at work and able to make payments, do so as soon as possible despite the forbearance period, as missed payments can still accrue interest, making the lifetime cost of your mortgage more expensive.

If you are late on mortgage payments, or will be unable to pay them in the future, immediately contact your lender in order to discuss available options like forbearance, and which ones are right for you and your family. According to the U.S. Department of Housing and Urban Development, your mortgage servicer will ask you to either indirectly or directly confirm that your financial hardships are related to the current pandemic; however, you will not have to provide any documentation. 

While so many aspects of homeownership are still uncertain, United Housing is here to help. If you are worried about making mortgage payments, call us at 901-272-1122, or visit our website to speak with someone about foreclosure, forbearance and what we can do to support you. Additionally, you can visit the U.S. Department of Housing and Urban Development’s website for homeowner-specific information on forbearance, as well as other housing resources as they relate to COVID-19. 

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