Blog

What You Should Know About Mortgage Forbearance

Posted on by Jenny Zamora

Like many Americans right now, you might be worried about making your next mortgage payment. Don’t panic just yet… Forbearance may be a good option for you! It means working together with your mortgage company to help you avoid any late penalties and eliminate any risk of being foreclosed on. You may also consider seeking the advice of an experienced real estate agent before contacting your lender.  

If you’re experiencing financial hardship due to COVID-19, here are some things you need to know about mortgage forbearance agreements.

What’s mortgage forbearance?

Mortgage forbearance is a program designed to provide temporary relief from your mortgage payment by either lowering your monthly payment or pausing your payments completely for a pre-determined amount of time. This is generally requested by homeowners who are going through some type of financial hardship affecting their ability to make their mortgage payments, like loss of employment, divorce, or illness.

Mortgage forbearance is not free money; you still owe the full amount of those reduced or missed payments.   

Does mortgage forbearance affect my credit?

Under normal circumstances [not during a global pandemic], it would be up to your lender whether or not to report your forbearance to any credit bureaus. However, right now mortgage lenders are providing struggling homeowners with an automatic, no documents required 3-month forbearance plan because of the coronavirus. They will not be reporting this forbearance plan to any of the credit bureaus either.  

Under normal circumstances, however, a forbearance would still be much less damaging to your credit than a few missed payments or foreclosure.

How does a mortgage forbearance work?

First of all, you have to make contact with 6your lender to see if they will approve you for a forbearance agreement. Don’t ever just stop making payments without speaking to your lender first. Normally, lender qualifications will vary slightly between different mortgage companies. The type of loan you have will also be a determining factor in what options you will be offered, or you will qualify for.

If you qualify for mortgage forbearance, your lender will work together with you to set up the terms of your agreement. Terms of forbearance may include:

  • Length of time for the forbearance period
  • Reduced payment amount required during the forbearance period.
  • Whether or not your lender will report the forbearance to credit agencies.
  • After the forbearance period ends how will you pay your mortgage moving forward, including skipped or reduced payments.

Once the forbearance period ends, you will have to pay your mortgage company back according to the terms you agreed on. Here are some typical options for paying back the missed amount:

  • Lump sum bringing the loan current in 1 single payment.
  • Adding an additional amount to your normal monthly payment until your current.
  • Normal payments will resume and missed payments will be added to your mortgage lengthening the terms of your mortgage.
  • Loan modification; when the terms of your mortgage are permanently adjusted by either a reduced payment, reduced principal or both.

How long will a mortgage forbearance last?

Mortgage forbearance is designed to provide temporary relief from your mortgage payment while you are going through a financial problem. Typically forbearance agreements do not last more than 3 months to 1 year.

Most mortgage companies will require you to provide them with regular updates during the forbearance period. If you need an extension, your lender will explain your options at that point.

Can a forbearance plan hurt my financial future?

A forbearance will usually be reported to the credit bureaus unless your lender has agreed to not report it. Right now, because of the coronavirus outbreak, almost all lenders have agreed to not report a forbearance to any of the credit bureaus. Having a forbearance on your credit history still looks much better than a foreclosure, short sale, and even a few missed payments.

Before you buy a new home in the future, you would need to re-establish yourself as a credible borrower. As long as you’ve already gone through the forbearance without missing any payments, the impact on your credit should be minimal and you may even consider applying for a new home loan from the same lender that granted you the forbearance.

How can I qualify for a mortgage forbearance?

The qualifications for mortgage forbearance are similar to that of a short sale. You start by applying. Most lenders will let you start the process online but I suggest you begin by calling your lender and take notes on every phone call… who did you speak to?… what happened on the call? etc. You can get started by gathering the following items.

  • Most recent mortgage statement.
  • List of your monthly income.
  • List of your monthly expenses.
  • Hardship letter, an explanation of why you cannot continue to make the mortgage payment (include any supporting documentation if possible).

Just like when I do a short sale in Orlando, it’s best to start communicating with your lender way before you miss any payments. If you already missed a payment before reaching out, it will show up on your credit report and stay until the loan has been made current again.

Keep in mind, if you’re filing because of a natural disaster or even a global pandemic like we’re facing currently, there’s usually a time limit in which you can file your claim.

If your request is denied, you then have an option to appeal the decision with your mortgage company. Then your application will be reviewed by a newly assigned loan officer, and they will reach out to you with an updated decision.

How do I get mortgage forbearance?

You should contact your mortgage servicer to apply for a mortgage forbearance agreement. Call the number on your monthly statement and ask for the mortgage forbearance dept to get started.

If you want unbiased advice about your financial situation, consider speaking to a housing counselor from the Department of Housing and Urban Development. You can make an appointment with a HUD counselor near you by going to their website. They will advise you on whether forbearance is a good choice for you in your current situation. They will also explain how different repayment plans would work.

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields

Orlando Homeowners Get A Lifeline

Posted on by Jenny Zamora

I’ve been a real estate broker in Orlando for the past 16 years and in that time I’ve never seen the economy come to a screeching halt like this before. Not even when the market crashed back in 2008 and the market was suddenly flooded with Orlando short sale properties that weren’t selling.

This pandemic is a different kind of disaster that has nothing to do with unethical mortgage companies or homeowners living well above their means. This is a situation that took us all by surprise and is out of our control as homeowners. Luckily, there is help out there for homeowners who are currently in financial trouble.

Orlando homeowners who’ve lost their job because of COVID-19 are getting some help with their mortgage. Depending on the situation they’re in, they should be eligible to have their mortgage payments suspended or reduced for anywhere between 3 and 12 months.

Our Federal directors, with the help of Freddie Mac and Fannie Mae, are instructing lenders to help homeowners out by offering flexibility. This would cover about 50% of all the home loans in the U.S. [loans that are guaranteed by Freddie and Fannie]. Regulators believe, however, that the mortgage industry adopts a similar policy with their customers.

Under this new plan, homeowners who lost their income could qualify for reduced payments or a pause to the payments altogether. This forbearance can be for up to 12 months depending on the homeowner’s situation.

Homeowners should not just stop paying their mortgage without contacting their mortgage company. Doing this will surely damage their credit. Their lender will work with them to at least suspend 3 months of payments right off the bat without any penalties and without reporting it to any credit bureau. They will do this with verbal testimony without any supporting documentation because of the coronavirus outbreak.

Within the 3 months, they should work with you to come up with a payment plan and may ask you for some proof of hardship to determine what your best options would be to get back on track.

COVID-19 mortgage help is not FREE MONEY!

You must know that help with your mortgage due to COVID-19 doesn’t mean free money. All homeowners will have to work out a repayment plan once they are back on track financially. This could also be simply extending the term of the loan.

Some may even have to repay the entire amount when the 90 days are up, depending on the banks’ criteria as well as the homeowner’s financial situation.

I believe this was a great 1st step by lenders. Could you imagine the mass panic throughout the US if, all of a sudden, homeowners couldn’t continue to make payments and all the lenders began foreclosure proceedings?!

There’s already enough stress about trying to not get the virus and keeping our loved ones safe and healthy that people should not have to worry about losing their homes.

Contact your mortgage lender

Homeowners needing help should reach out to their servicer immediately and find out what their options are. Explain to them that you are having financial problems because of the virus outbreak and request to be put into a forbearance program.

Some of the largest mortgage lenders in the country, like Wells Fargo and Chase, are also working to help homeowners who have been financially hurt by the coronavirus. These lenders have the responsibility to follow through on what our government directed them to do.

Mortgage companies have also been told to pause all foreclosure proceedings as well, although anyone in foreclosure right now would have had to be in trouble before the coronavirus even started spreading in the U.S. I believe this was more of a public health move than anything else.

Can a mortgage forbearance end up as a short sale?

Once a mortgage forbearance agreement has come to an end, there is still a chance that you don’t like the terms, or you still can’t afford what they’re offering. In this case, traditional loss mitigation procedures may resume. At this point, the usual options will be available to you like a short sale, loan modification, or a deed in lieu. Homeowners may feel that one of these options will benefit them more than agreeing to the terms they have laid out for you in the forbearance program.

Help for renters

These plans by mortgage companies don’t do anything to help renters. Renters, however, can apply for rental assistance through state and federally funded rental assistance programs. I would also suggest reaching out to your landlord and maintaining open lines of communication.

Landlords feeling the pain

Keep in mind, landlords are suffering as much and even more right now. Mortgage forbearance programs are designed for people’s homestead properties and not investment homes. Imagine you have 10 rental properties, 10 mortgages to pay… then, all of a sudden, you stop receiving 10 rental checks all at once!  

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields

A wave of Short Sales could be headed for Orlando due to COVID-19

Posted on by Jenny Zamora

While stay-at-home orders are keeping people at home, many Floridians could be falling behind on mortgage and rent payments due to loss of employment and an economy on a downward spiral.

The real estate data-service provider, Attom Data Solutions, reported that 10 of Florida’s 67 counties are in the top 50 most vulnerable counties in the U.S. to the economic impact of the COVID-19 pandemic. Most of these counties are in either North or Central Florida, including Osceola, Hernando, Flagler, Clay, Lake. Surprisingly, Broward county was the most vulnerable of the South Florida counties.

The only state that ranked higher than Florida in this study was New Jersey with 14 counties in the top 50 most at risk in the nation. Also ranked near the top were New York, Connecticut, and California. Real estate markets in the Midwest and West are considered to be less likely to see big numbers of people losing their homes because of the virus outbreak.

483 counties throughout the US were studied to determine what percentage of homes we can expect that will be receiving foreclosure notices by the end of 2020 and what percentage of the local wages are needed to pay for homeownership. The study used data from the last quarter of 2019 to calculate the averages.

Central Florida has one of the lowest median incomes in the U.S. The local economy is largely dependent on tourism and convention revenue which could mean big trouble for homeowners. Many landlords are suffering right now… especially if they depend on rental incomes to pay the mortgages.


Central Floridian homeowners could be facing rough waters ahead

Realtors in Orlando are also starting to feel the pain. Activity has slowed for both buyers and sellers with only people who have no choice but to buy or sell eager to close. Home sales in Orlando are reaching the levels that we saw back in 2008 after the market crash. Orlando Realtors are losing almost $700,000 in daily commissions from the pandemic.

Right now it’s too early to say how this will all play out because we don’t know how effective the Federal stimulus will be in helping people through this financial rough patch. Banks are granting temporary mortgage forbearance to many homeowners and businesses will hopefully get enough help to pay employees through the crisis.

I believe lenders will have to step up and provide some major help to prevent foreclosures in Orlando and other Florida cities. In my opinion, it’s the only way to avoid large numbers of foreclosures and short sales in Orlando.

Potential for Mass Short Sales in Orlando

Like I said before, it’s too early to tell what will happen to Orlando real estate market as a result of coronavirus. However, I do think that if people don’t get back to work in the next couple of months, short sale Realtors in Orlando will be extremely busy by the end of 2020 and well into 2021.

Even lenders aren’t sure how everything will end up playing out because they don’t know how much time it will take for Floridians to get back to work. Short sales and loan modifications are used as an alternative to avoid foreclosure. The problem with loan modifications is that the homeowner will still be on the hook for the entire amount of the loan but with lower payments.

I’ve been a short sale Realtor in Orlando since 2004 and 9 out of 10 times when I present my clients with the terms of both a short sale and a loan modification, they choose short sale.

Doing a short sale, however, will allow the homeowner to sell the home for less than what’s owed on the mortgage. By doing this, the lender gets at least most of their money back and avoids a lengthy and expensive foreclosure process. The homeowner also benefits from a short because they can avoid having a foreclosure on their record and won’t be responsible for the difference between what they owed and what the home sold for.

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields

Orlando Real Estate Market Surviving Amidst COVID-19

Posted on by Jenny Zamora

What should be the start of peak season for Orlando real estate is instead a slower market for both buyers and sellers. Coronavirus has made it difficult for potential buyers to look at homes.

However, despite our current situation with the Pandemic, there are still some signs of life according to real estate agents in Orlando.

Jenny Zamora, Owner/ Broker at Orlando Realty Consultants breaks down what’s currently going on in the Orlando real estate market while Florida residents are under strong recommendations to stay home.

RE Transactions Still Being Made

Even though most employees at title and mortgage companies are working from home instead of the office, they are still working hard putting through mortgage and refinance applications as mortgage rates continue to drop.

“Offers are still being made,” said Zamora. “I am still receiving offers on my listings and buyers are still making appointments to visit homes”

Virtual Tours More Common

Even though most people aren’t physically looking at homes right now, it doesn’t stop them from shopping around. Although people are a bit afraid to look at homes in person, it doesn’t mean they aren’t shopping around.

Virtual tours of Orlando homes are now more popular than ever. People are carefully going through all the photos and videos that they can on a home. They’re doing as much research as possible so that when they’re allowed to physically see the homes, they’ll be ready with a plan to move forward.

Zamora says “Potential homebuyers are relying heavily on any pics and videos they can find online. Some people are in situations where they need to move, so they have no option but to keep pressing forward with their home search.”

Transactions Taking Longer to Close

Luckily, title and mortgage companies can push through deals that have been started before the pandemic on time. However, moving forward, transactions are now expected to take a bit longer to close until things get back to normal.

“Appraisers, home inspectors, and surveyors have had an easier time scheduling visits as these can work while maintaining social distance.

Will it Be A Seller or Buyers Market When Things Are Normal Again?

Before the COVID-19 pandemic began, inventory was low and home values were high making it a seller’s market. However, with the current rising unemployment rate and an economy on a downward spiral, Orlando home values are expected to fall rather quickly. When this happens it will shift the market making it a buyer’s market. Right now it’s just too early to say for sure what will happen.

“As of today, I don’t believe there’s been a major shift yet,” said Zamora. “Buying power is still there for the most part. Interest rates are at an all-time low, so money costs less. This is what helps to counterbalance the market and current home values that are out there. It’s still a bit too early to tell if the pandemic will have a more sustained impact on homes sitting on the market for longer periods.”

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields

Orlando Realtors Relying on Tech More Than Ever Amidst Coronavirus

Posted on by Jenny Zamora


Realtors in Orlando Doing Whatever It Takes

Although buyer activity has slowed down a bit, many buyers can’t put off buying a house for whatever reason. Even though people are held up at home, it doesn’t mean they can’t continue the search for their dream home right from their living room. Because of virtual tours, online mortgage application platforms, and tools like Facetime, Orlando real estate agents like myself are still conducting business… not quite “as usual”.

Armed with the latest technology such as smartphones and social media platforms, sellers and buyers have no choice but to rely on the internet for guidance. It’s become apparent that people are becoming more comfortable with technology… even seniors. Virtual tours have never been more popular in Orlando real estate. It’s the only way I’ve been buying and selling houses for the past several weeks.

I’m the kind of Realtor that likes to form a connection with my clients which usually results in a friendship. This means showing properties in person, being present at inspections, showing up to closings, etc. However, I’ve had to get used to doing everything I normally do via emails and lots of phone calls.

This also applies to sellers who need to sell their homes in Orlando. Just a few days ago I acquired a new listing in Orlando. Working together with the seller we got the listing up without ever meeting in person. He was adamant about not wanting anyone in his house and I don’t blame him. We did a thorough walk-through of the home so I could get a feel for it via phone. After giving him a few staging tips, the home is now set for photographs.

Realtors in Orlando and everywhere else for that matter, are having to adjust their practices to continue to do business. For right now and the foreseeable future… this marks the end of open houses and in-person closings and the beginning of virtual tours and remote closings using online notaries.

The Florida Department of State legalized online notarizations as of Jan. 1, 2020. This allows sellers and buyers to close on a home without actually being in the same room.

I believe that real estate deals in Orlando and everywhere else in the world will rely on technology even more so in the future. The public has no choice but to be more trusting of the technology.

Will Orlando Real Estate contracts contain a coronavirus clause?

Social distancing has made it virtually impossible for Orlando real estate agents to show homes and get people together at the same closing table right now. Orlando as of yet doesn’t have a coronavirus addendum to be used in real estate transactions like some other parts of the country have.

Florida however, has recently approved a Coronavirus Extension addendum. This form is available to use when the parties of a real estate transaction need to extend certain dates or periods as a result of COVID-19.

The form includes checkboxes with extension options for the following:

  • Closing date extension
  • Financing period extension
  • Inspection period extension
  • Title cure period extension
  • Feasibility study period extension
  • Due diligence period extension
  • Homeowners’/condominium association approval extension

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields