Great resources for Quicken loans clients impacted by COVID19 on who should apply? What is a Forbearance? What happens when the Forbearance is over? Why Forbearance?
FAQ: Quicken Loans® Clients And Mortgage Assistance During COVID-19
Resources For Quicken Loans Clients Impacted By COVID-19
If you’re worried about making your mortgage payments, here’s what you should know:
· You can find resources online: You can begin the process online through Rocket Mortgage® by Quicken Loans®. Here, you’ll be able to make your payment, find FAQs on the impact of COVID-19 on your mortgage and apply for assistance if you need it. If you can, it’s best to continue making your mortgage payment because you will have to catch up eventually. If there are any expenses you can cut, do so at your discretion. The first priority at this time is the health and safety of your family.
· If you expect this to impact you for a while: At this time, Quicken Loans is offering an initial relief option of a forbearance, which is a temporary pause of your mortgage payments. You can fill out an application for assistance. Once the crisis is over, we would work with you to determine the best course of action when you’re ready to resume payments. The payments paused during forbearance won’t be reported late to the credit bureaus.
· We’re talking: We’re also working with policymakers to give them our firsthand knowledge of what’s happening in American homes during this crisis so that they may better understand how they can bring relief.
· Check back: This is a fluid situation, so we’re going to be posting updates for you as we get them. Thank you for your understanding!
Those are the basics. Let’s get into a little more detail so you really understand what your options are.
Who Should Apply For Assistance? If you can afford to make your mortgage payment, please do so. When there’s any kind of payment pause, Quicken Loans and other mortgage lenders keep making your mortgage payment on a monthly basis to the bondholder invested in your loan.
Additionally, the initial period of any offered forbearance is 3 months. By waiting until you need the help, you give yourself the most time when you need it. The assistance being offered around this COVID-19 situation is available for those who have lost work, are ill or can’t work due to caring for a sick family member.
What’s A Forbearance? A forbearance is a temporary pause of your mortgage payment. In this case, the forbearance will last for an initial period of 3 months. Once that timeframe is up, we work to reevaluate your situation and determine the next step, which can be a continuance of your forbearance. If you’re ready to resume payment, we move toward payment options.
We won’t report payments that are paused during forbearance as late.
What Happens When The Forbearance Is Over? When you are ready to resume payments, the money from the forbearance needs to be paid back. There are three ways to go about that:
Lump Sum Payment: If you can afford it, the simplest thing to do is make a lump sum payment and pay off the whole amount you owe. That sounds like a big chunk, but one of the options you have is to pay whatever you can during the forbearance in order to cut down on the amount you owe at the end. Still, we understand not everyone has the money, so there are other options.
Repayment Plan: The second option is to go on a repayment plan. With this, you make your regular mortgage payment plus some extra in order to pay off the amount you still owe from your forbearance over a set period of time.
Modification: By modifying your loan, we can roll the balance back into the mortgage.
You Can Extend Your Forbearance, If Necessary . At the end of your plan, you’ll have the option to extend your forbearance. This may be right for you if you need more time before resuming payments.
If you extend your forbearance, you’ll still need to bring your loan current when your plan ends. That means making all the payments that were paused during forbearance, plus any payments that were past-due before your plan began, if applicable. An extended forbearance means a larger amount you’ll need to bring current at the end of the plan.
Why Forbearance? It’s a fair question. To understand why forbearance, it helps to know a bit about how the mortgage market works.
Most mortgage lenders in the industry today, including Quicken Loans, are mortgage originators. That means they underwrite your loan to make sure you qualify under the standards of a major mortgage investor like Fannie Mae, Freddie Mac, the VA, etc. After your loan closes, they sell your loan to that investor, who then makes it available on the bond market for investors who are interested in mortgage-backed securities. The major mortgage investors are offering forbearance for clients who need assistance at this time. We’re in communication with policymakers in these institutions as well as the broader government to advocate for the best possible relief options for the American homeowner.
Other Useful Resources If you own a small business, the federal government has declared an intention to make disaster relief funding available for COVID-19-impacted businesses.
We’ve also updated our procedures for home appraisals and closing appointments for the safety of our clients, our team members and our community.
Wellness is our top priority, and we know that financial wellness can be affected by your personal health, so it’s important to follow the directives provided on the CDC’s COVID-19 site. Stay safe and healthy!