Navigating the COVID-19 mortgage assistance process - not so simple for some

Michael Ginolfi lives in Marlboro, New Jersey, and was running a successful business providing photography and DJ services for weddings and special occasions prior to the coronavirus crisis. With nearly all events postponed due to social distancing regulations, his business has been hit hard.
“This is scary,” says Ginolfi. He asked his mortgage lender for a forbearance. The bank said yes, but there was a catch. “They hit you with three months, and on the 91st day they want four payments all at one time,” he says. "So if you're not working, where is this coming from?"
Lori Ketcham lives in Islip Terrace, New York. She got the same answer when she asked for help with their home mortgage.
"How are people gonna come up with four months on the 91st day?” she asked.
But didn’t the CARES Act require banks to give a year’s forbearance? Wasn’t there supposed to be an option to move payments to the end of the term? The answer is yes, but it’s not that simple. You can get up to a year forbearance, but only if the mortgage is federally backed by an agency like Fannie Mae. Even then, it may not come all at once.
Andrea Bopp Stark, of the National Consumer Law Center, says repaying the missed payments is also complicated.
“Some servicers are giving that in 90-day increments. But there should be a quick and easy process to renew that,” says Bopp Stark. "There’s not one option at the end of the forbearance period. One of the options is the servicer will demand full payment. But the federally backed loans do have programs in place to help borrowers in place to help borrowers repay this."
One option, which everyone wants, is the deferral to move missed payments to the end of the term interest-free, with five years to catch up on property tax and insurance escrow. But for that, you have to qualify - and that means proving you need that forbearance because of financial damage caused by COVID-19. 
"If you can show that you were current before all of this, then hopefully you’d be approved for an extension of the terms at the end. But it’s not a guarantee,” says Bopp Stark.
The National Consumer Law Center says evaluations to have mortgage payments deferred to the end of your mortgage won't begin until July in most cases, but you can and should begin to look at your options now.
Walt Kane answers News 12 viewers' COVID-19 questions in this week's Consumer Alert Q&A on Facebook:
 
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