Letters to the Editor • Opinion
We already know how to prevent pandemics

Over a few weeks, the talk about mortgages turned from how to best take advantage of record low interest rates to how to handle a mortgage without income. More than 22 million Americans have filed for unemployment in the past five weeks. Lenders are dealing with a wave of panicked borrowers wondering what to do if they can’t make their April payment and won’t be able to pay for the foreseeable future.

We asked Marietta Rodriguez, president and chief executive of NeighborWorks America, a national nonprofit group that works to provide affordable housing, to share what unemployed borrowers should do now. Her responses, via email, were edited for clarity and length:

Q: What should you do first if you can’t pay your mortgage or can pay only part of it?

A: You should contact your lender as soon as you realize that you have a problem, and be prepared with your account information and a summary of the problems you are experiencing.

Here's what you need to know about paying your rent or mortgage

Q: Is forbearance my only option?

A: Your lender can tell you if your mortgage qualifies for any of the mortgage forbearance options. However, there may also be other options that the lender can discuss with you that might better suit your financial circumstances.

Q: What does forbearance entail, and how long can it last?

A: Under the Cares Act’s mortgage forbearance program, a homeowner experiencing financial hardship as a result of the coronavirus pandemic can request a short-term forbearance and not be required to make monthly mortgage payments for the period of that agreement. [According to the Consumer Financial Protection Bureau, the initial phase is up to 180 days.] Additionally, servicers must extend the forbearance for up to 180 days, if the homeowner requests it.

Q: What documentation will I need to prove I can't pay?

A: Documentation requirements are minimal. Borrowers need to request the forbearance and affirm that they are experiencing a pandemic-related financial emergency.

Q: Will late fees and interest accumulate until I can get caught up again?

A: No.

Q: How do I get caught up? Will I need to make a lump-sum payment, or can it be added to my loan balance?

In some cases, the amount covered under the forbearance agreement would be moved to the back of the loan balance and satisfied at the time the mortgage is paid in full. However, homeowners should discuss and clarify expectations with the lender.

Q: Whom do I contact? I've heard it's hard to reach lenders now.

A: Lender phone lines are experiencing high volumes right now as lots of consumers rush to get forbearance agreements in place. Persistence in calling will be required. A counseling agency approved by the Department of Housing and Urban Development can assist with making sense of the options available to homeowners. Search online for a housing counseling agency near you, or call HUD’s voice system at 800-569-4287.

Q: Will this hurt my credit score?

A: No. During the period of the forbearance agreement, mortgage payment delinquency will not be reported to the credit bureaus.

Read more:

Mortgage help is available for homeowners during the covid-19 crisis

If you can’t pay your mortgage, here’s what you need to know

No money for rent or mortgage? Here’s what to do.