Biden expands protection for homeowners. What you need to know

Homeowners struggling amid the coronavirus pandemic got some welcome news Tuesday, with the Biden government announcing it will expand tolerance and foreclosure programs.

The White House said the move will benefit the 2.7 million homeowners currently in Covid tolerance and expand the availability of respite options for about 11 million other government-backed mortgages nationwide.

“Since the crisis is going on for much longer than anyone expected, it is only appropriate to expand remedies that we know work,” said Sarah Gerecke, associate professor of planning at New York University. Many of those emergency response options would expire next month.

Do you have questions about the new protections? Here are some answers.

Federally secured mortgages, or about 70% of borrowers, qualify for the additional forbearances.

If you have such a home loan, you can register for a respite until June 30 and possibly six months afterwards. If you have a mortgage with Fannie Mae or Freddie Mac, you can delay your payments for at least another three months.

“The easiest way to find out if you qualify and seek relief if you need it is to contact your lender,” said Greg McBride, chief financial analyst at Bankrate.com.

Heavy paperwork requirements prevented many homeowners from getting relief during the 2008 crisis, McBride said.

Fortunately, during the pandemic, all you have to do is confirm that you were in financial trouble.

Yes. Your patience is not renewed automatically.

“You have to contact your lender and ask for it,” said McBride.

Some people will be tolerant for as long as 18 months, since the first stimulus package passed in March, the CARES law, offered homeowners two 180-day defecation periods, and now Biden’s administration is granting them two additional three-month breaks.

Fortunately, if you are eligible for the forbearance, you do not have to pay in one go at the end of the childcare period. (Although, if you’re one of the 30% homeowners who don’t have a government backed or guaranteed mortgage, you could.)

Instead, you can request that your payments be rolled over to the end of your loan, McBride said.

For example, if you missed 12 months in payments, it would now take 31 years for a 30-year mortgage to pay off.

At least you should be safe until the end of June.

You will not be banned during the moratorium period unless you have left or left your property, ”said Sara Singhas, director of credit administration at the Mortgage Bankers Association.