Fallout from the abrupt closure of local businesses has created financial chaos for some St. Cloud homeowners. For breadwinners forced to make painful choices between creditors, there seems to be no right answer. With payments pending for auto loans, credit cards, student loans, and/or the big one—the monthly mortgage payment—the dilemma can be all but disabling.

Recognizing the unfairness of the situation, the Federal government included in its CARES Act (that’s the $2.2 trillion stimulus package) a provision meant to provide temporary relief to many St. Cloud homeowners. Those with federally backed mortgages can request a “forbearance period” of as long as 180 days—with an option to extend for another 180 days. Since 95% of conforming mortgages on single-family homes are backed by one of the federal programs, many St. Cloud homeowners should qualify. Although jumbo loans are not included, most mortgage servicers have stepped forward to work with borrowers who need help as a result of the COVID-19 pandemic.

Forbearance doesn’t come automatically, though; it must be requested. That may take patience—telephone lines have been jammed, and even emailed requests may be slow to be returned. That’s understandable when you realize the massive size of the operation (Moody’s Analytics estimates that by the end, 15,000,000 loans will be modified). But for homeowners forced to wait for business activity to resume, persistence should pay off. When forbearance is granted, delayed payments won’t be reported to credit bureaus, and no late fees will be charged.

The details of forbearance agreements differ—and like any financial arrangement, it’s important to get written confirmation, even if only via email. If you have questions about this or other St. Cloud real estate issues, do give me a call!

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