From LPB’s Louisiana: The State We’re In – Tom D’Armond, VP GMFS, discusses the current problem and solutions for homeowners during the pandemic.
Louisiana ranks second in the nation in homeowners who are behind in their mortgage payments, related to job loss and problems brought by the pandemic. Tom D’Armond, VP Servicing GMFS Mortgage, discusses the problem and what solutions might exist.
“Most of the mortgages that are made In the U.S. are backed by federal agencies, whether that’s Fannie Mae or Freddie Mac or HUD, so the federal government and these agencies will put in place relief efforts for Covid- 19 and they’ve done that and they’ve been more consumer friendly, I would say. These are options that were not available in 2016 when the floods drove people out of their homes.”
D’Armond says through the cares act, these federal agencies are allowing for a forbearance, which literally means to hold back, as in holding back from moving toward foreclosure.
“So it allows you to miss up to 12 payments of your mortgage and at the end of the 12 period they typically start with a 6 month time when you are talking to your servicer, a 3 to 6 month time where you let your servicer know you can’t necessarily make the payments. They will put you in a forbearance period, it is not reported to your credit bureaus that you are late. Which is very beneficial for consumers and it allows you time to get back on your feet.”
D’Armond says there are number of other options to fit different situations.
“If you have a conventional loan as opposed to an FHA, VA loan or USDA loan, if you have a conventional loan, Fannie Mae and Freddie Mac have come out and say you can do what is called a deferment. A deferment takes those payments that you missed and basically puts it on the back of the loan. So you don’t have to come up with all the payments in the beginning. When you call into your servicer, your servicer is going to ask, “can you make up the three or four payments you missed?” A large number of people are going to say no, so payment plans are another possibility.”
“It is a horrible situation but this winds up being a great thing and a real blessing, it sounds like to me,” says Andre’ Moreau, LPB.
“It really is. The agencies have worked hard with their lenders such as GMFS to get our input on what consumers really need. When the floods struck, options were few, so that caused more stress for the borrowers because they didn’t have a year and weren’t able to do a deferment. FHA and VA have come out with very similar options, it is a tough time for a lot of people making their mortgage payment. There are things being done by these agencies to help as much as they can.”