What Do Biden’s Mortgage Protection Extensions Mean For You?

The COVID pandemic has had many unwanted (and unforeseen) consequences. One is that millions of American homeowners are struggling with their mortgage repayments. To help ease the potential tsunami of mortgage foreclosure disasters, the Biden administration brought in additional and extended relief. 

But what does this mean in reality? Does your situation qualify and how long will this safety net last? 

Read on to discover everything you need to know about Biden’s mortgage protection scheme. 

Biden’s Mortgage Protection: How it works, who’s eligible, & how to apply 

• Biden’s mortgage protection: how does it work?
• Biden’s mortgage protection: who’s eligible?
• Biden’s mortgage protection: how to apply

Biden’s mortgage protection: how does it work? 

The original COVID forbearance and foreclosure relief plans were originally meant to end in March 2021. However, these were extended to allow the 2.7 million Americans currently in forbearance to have further help and open the scheme up to another 11 million who have government-backed mortgages. 

While the timeline to enroll in the extension to these schemes has now passed, it means that those who applied potentially can benefit from them from further relief up until June 30, 2022. However, if you have a Fanny Mae or Freddie Mac mortgage, there are no time restraints on applying for the original COVID relief package (but you can’t then request the new extension).

There are two separate types of relief: Mortgage Forbearance and Mortgage Foreclosure. In the simplest of terms, they work in the following manner:

• Mortgage Forbearance relief:  The original package offered homeowners 2 x 180-day relief periods. The new extensions allow 2 x additional 3-month breaks. However, the length of time you can benefit is dependent on the type of mortgage you have. Fannie Mae or Fanny Mac customers can delay for up to 15 months. Those with the US Dept of Veterans Affairs, Dept of Agriculture, or the Federal Housing Administration can delay for up to 18 months.
• Mortgage Foreclosure relief: This relief meant that, if you were unable to pay your mortgage, no foreclosure proceedings would be commenced before June 30, 2021. Those who expected to still be in financial hardship at this time should have applied for the above forbearance relief, giving them a vital safety net for a further 15 or 18 months.

Biden’s mortgage protection: who’s eligible? 

The protection is only available for those who have government-backed mortgages. It doesn’t apply to private mortgages. If this is your situation, it’s still worth reaching out to your provider to ask what protection they’ve put in place. 

Biden’s mortgage protection: how to apply?

It costs nothing to apply for the forbearance package and no proof of financial hardship is required. You simply contact your mortgage supplier and request to be included in the scheme. However, it’s important to know that, even though you benefit from up to an 18-month repayment holiday, interest will continue to accrue on your loan. Therefore, you should only apply if you really need it.

Once the relief period comes to an end, you’ll need to arrange with your provider how you’ll repay the missed payments. This could be via a repayment plan, lump sum, payment modification, or simply be deferred and tacked onto the end of your loan.

Remember, taking advantage of Biden’s mortgage protection plan means no negative credit score and, for many, a welcome lifeline that allows you to keep ownership of your precious home. 

Need Mortgage or Estate Planning Advice? Contact Capita Today

It’s never too early or too late to get expert advice regarding your mortgage or estate. At Capita, our financial advisors are well-versed in every type of situation. Whether you’re struggling with repayments, considering moving into the real estate market, or want to put solid plans in place, our confidential and knowledgeable service will help you maximize your assets. 

Visit https://www.capitafinancialnetwork.com/services/estate-planning to find out more and get in touch for a discreet, no-obligation discussion.