Gephardt: Mortgage Relief Options Available, But You Have To Ask For Them

May 14, 2020, 8:39 PM | Updated: Jun 19, 2022, 10:02 pm

SALT LAKE CITY, Utah – With about 175,000 Utahns filing for unemployment since March 15, the COVID-19 pandemic has left many struggling to pay their mortgages. Many lenders are offering programs to keep homeowners in their homes but there is a key step many have not taken yet – contacting their mortgage companies.

“The worst thing to do is run the other way; to kind of ignore this and hope it goes away. That’s not going to happen,” said Greg McBride, chief financial analyst for Bankrate.com.

In a new Bankrate survey, three out of five borrowers for both home and auto loans had not reached out to their lenders.

“We saw a lot of reasons,” McBride said. “People saying that they didn’t know this was an option, they were waiting for the lender to contact them or they just hadn’t gotten around to it.”

About seven in 10 mortgages are federally backed, i.e. Fannie Mac, Freddie Mac, FHA, VA and USDA, so most homeowners can get help if they have been hit hard by the pandemic.

“You’re actually going to have actually suffered a financial impact via reduction in hours, or an outright job loss or furlough before you’re eligible for some of these payment relief measures,” McBride said.

One measure is what is called forbearance, where you can put your mortgage on hold for up to six months, under the CARES Act. But it’s not forgiveness — those missed payments don’t go away.

Say your mortgage is $1,200 per month and your payments get deferred for six months. When the forbearance ends, you are still on the hook for that $7,200.

You can pay that back by paying extra each month until you’re caught up. Another option is to tack on those missed payments to the end of the loan. Or, you can make one huge lump sum payment.

That last one caused a lot of panic early on because some lenders told their borrowers the lump sum was the only option.

“One of the common misperceptions is that you have to make those payments up in one fell swoop with a big lump sum payment later,” McBride said. “The Federal Housing Finance Authority actually issued a statement to clarify that is not the case.”

While COVID-19 forbearance programs cannot hurt your credit score under the CARES Act, they can keep you from refinancing.

“If you can make your payments, you should continue to do so,” advised McBride.

Another possible option: a loan modification that lengthens the loan or lowers your interest, so you’ll have a lower, more sustainable monthly payment.

If you don’t have a federally backed mortgage, you still might have relief options through your mortgage loan servicer, if you contact them.


KSL 5 TV Live

Top Stories

KSL Investigates

A rendering of a cell site simulator. (KSL TV)...
Daniella Rivera and Annie Knox

Utah placed limits on police use of spy tech; Do they go far enough?  

For months, the KSL Investigators have been asking questions about spy technology law enforcement uses but doesn’t want to talk about. What exactly does the high-tech tool do, and what happens to your information if it gets caught up in a digital dragnet?
6 days ago
FILE PHOTO - Shown are a smartphone and computer....
Matt Gephardt & Sloan Schrage, KSL TV

Why you should stop using your work computers, phones for personal use

Many Utahns are still working from home, spending a lot of time on their work computers. That can make it easy to forget it's not a personal computer. But KSL's Matt Gephardt has three reasons why you should use your work computers for one thing — work.
6 days ago
fireworks injuries study...
Matt Gephardt

Study: More people need E.R. care after playing with fireworks

A report from the U.S. Consumer Product Safety Commission may throw a wet blanket on your 4th of July plans – or at least make you think about bringing a wet blanket with you just in case your family’s celebration adds to a troubling trend.
8 days ago
Peter Ingle talking to Matt Gephardt...
Matt Gephardt & Cindy St. Clair, KSL TV

Too risky to insure? Why your homeowner’s insurance could go up in smoke

There are good reasons for an insurance company to drop your homeowner’s coverage. But what happens when you’re dropped for something you have no control over? KSL Investigator Matt Gephardt went out to find: can they do that?
9 days ago
FILE - Thousand gather at the Utah State Capitol to support a woman's right to choose. (KSL TV)...
Daniella Rivera

‘It was hastily passed’: Medical, legal experts raise concerns about Utah’s abortion trigger law

Senate Bill 174, passed by the Utah Legislature in 2020, was crafted, in part, to send a message. Now, medical and legal experts are sounding alarm bells about how it will work in practice.
12 days ago
FILE - Credit and deposit cards on a computer keyboard. Electronic commerce, business. Online shopp...
Matt Gephardt

Gephardt Busts Inflation: Americans shy away from using credit cards abroad, missing out on best exchange rates

As COVID-19 wanes, travel agencies are seeing a massive spike in bookings as folks look to spread their wings and travel abroad.
12 days ago

Sponsored Articles

hand holding 3d rendering mobile connect with security camera for security solutions...
Les Olson

Wondering what security solutions are right for you? Find out more about how to protect your surroundings

Physical security helps everyone. Keep your employees, clients, and customers safe with security solutions that protect your workplace.
Many rattan pendant lights, hay hang from the ceiling.Traditional and simple lighting....
Lighting Design

The Best Ways to Style Rattan Pendant Lighting in Your Home

Rattan pendant lights create a rustic and breezy feel, and are an easy way to incorporate this hot trend into your home decor.
Earth day 2022...

How Are You Celebrating Earth Day 2022? | 4 Simple Ways to Celebrate Earth Day and Protect the Environment

Earth Day is a great time to reflect on how we can be more environmentally conscious. Here are some tips for celebrating Earth Day.
Get Money Online...

More Ways to Get Money Online Right Now in Your Spare Time

Here are 4 easy ways that you can get more money online if you have some free time and want to make a little extra on the side.
Lighting trends 2022...

Lighting Trends 2022 | 5 Beautiful Home Lighting Trends You Can Expect to See this Year and Beyond

This is where you can see the latest lighting trends for 2022 straight from the Lightovation Show at the Dallas World Trade Center.
What Can't You Throw Away in the Trash...

What Can’t You Throw Away in the Trash? | 5 Things You Shouldn’t Throw in to Your Trash Can

What can't you throw away in the trash? Believe it or not, there are actually many items that shouldn't be thrown straight into the trash.
Gephardt: Mortgage Relief Options Available, But You Have To Ask For Them