As your Lancaster property managers, we know that the current financial slide and the global health pandemic have a lot of people on edge. Whether you’re reeling from your own job loss or trying to figure out how you’re going to cover your mortgage payments when rent isn’t coming in consistently, we’re here to provide you with support and resources. If you’re not already working with a central Pennsylvania property management company, you can count on us to help you through this current crisis.
We know the Lancaster property management industry better than anyone, and we are in constant contact with our partners and our professional network. We are pleased to bring you the latest information as soon as we have it.
In response to the economic slowdown, the federal government has passed the Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act. This provides stimulus relief for taxpayers and small businesses, and it also helps you with some mortgage relief. That’s what we’re focusing on in this blog.
One thing to keep in mind is that information is changing every day. For a more up-to-date answer to a specific question you might have about your unique situation, we welcome you to contact us.
CARES Act Section 4022: Foreclosures and Forbearance
If you have a federally backed mortgage on your investment property, you can receive some payment relief from the CARES Act. Most borrowers have a loan that’s insured by Freddie Mac or Fannie Mae, which protects you against foreclosure if you find you do not have the financial resources to make your mortgage payments.
We’ve heard that a number of lenders have been proactive about contacting their clients. You may have heard from your bank already, with an offer for a forbearance or a payment plan. If you haven’t heard from your lender yet, now is the time to reach out.
Requesting a forbearance is pretty simply. There’s not a lot of documentation you need to provide, unlike when you’re applying to refinance a loan. You’ll need to certify that you’re facing a financial hardship due to the COVID-19 pandemic, and we can’t think of anyone who isn’t facing financial uncertainty. You’re almost guaranteed to get approved for a forbearance. This will apply to you even if you are currently delinquent on your mortgage payments.
You can request a forbearance of up to 180 days, and your lender is required to honor it. If you find that you still need more time after the 180 days has come and gone, you can apply for extra time. If you find that you’ve rebounded faster than you expected, you can resume your mortgage payments before those initial 180 days are over.
Ask Your Lender About Repayment
The CARES Act is providing a lot of much-needed relief, and not having to stress about losing your home or your mortgage can provide a lot of peace of mind, especially if it’s a rental property that isn’t bringing in the income you had counted on.
However, there is still a lot we don’t know. Most specifically, we don’t know how borrowers will be expected to catch up with those deferred mortgage payments. You may find your bank asking for all those payments at once at the end of the 180 days. That might be hard to come up with, so find out what you’re really agreeing to.
With your own mortgage payment relief comes some responsibility to your tenants. If you’re renting out a property and that property carries a federally backed mortgage, there’s a moratorium on evictions.
Contact us at Fetch Home Management if you have additional questions, and we’ll try to help you figure out how this pertains to Lancaster property management and the effective leasing of your property.