If Bank of America is your mortgage servicer and your ability to make your Destin, Florida mortgage payments has been affected by the COVID-19 crisis, be careful asking them for assistance. Bank of America, one of the biggest U.S. mortgage servicers, recently changed their home borrower website to reflect choices of either mortgage forbearance or mortgage deferral for those who are struggling and want to avoid foreclosure. A week ago, Bank of America only offered forbearance on their website. Most people don’t know the difference. Mortgage forbearance is a delaying of payments due. This may be for a period of three months, six months, or even longer. At the end of the forbearance period, you may have to pay back all your missed payments at once in a lump sum. (Yikes!)
Mortgage deferment, or deferral, on the other hand, would allow you to add the skipped payments to the end of the loan by extending the loan term, or obtaining a second mortgage that would not be payable until the first mortgage is paid off e.g. when you sell the house. (As of April 1, FHA or HUD backed mortgages will allow mortgage deferment during the Coronavirus crisis). Mortgage deferment is more palatable to many people, because who would suddenly have enough money for three to six months of payments, if they had asked to skip them in the first place?
Take note, however, you won’t automatically get a deferment even if you check the right box on the Bank of America website. They will tell you that if you have a Fannie Mae or certain other government-backed loan, they cannot offer you a deferment. If you choose forbearance, in that case, you may have an option of spreading out the missed payments to re-pay them after the forbearance period ends, modifying your entire mortgage to include those payments, or paying the full amount in a lump sum, as specified in the CARES Act.
After you request mortgage assistance online, Bank of America will send you a follow-up email and mail you one or two letters. The first, a forbearance letter, and the second, a letter offering you a dedicated mortgage specialist to discuss your situation. (Obviously, they have not refined their system yet.) If you are not sure how to proceed, keep following up with them, as the mortgage assistance programs are changing regularly.
Here is a copy of a Bank of America forbearance letter.
If you find that during or after the COVID-19 crisis, you must sell your Emerald Coast real estate, consider your options. Contact me to explore whether it’s realistic and how you may accomplish it, whether by short sale or traditional sale.
It’s Wendy… It’s Sold!
Wendy Rulnick, Broker, Rulnick Realty, Inc.
Email Wendy: [email protected]
Wendy Rulnick, Broker, sells traditional and short sale real estate in Destin, Santa Rosa Beach, 30A, Miramar Beach, Crestview, Sandestin, Seaside, Rosemary Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Florida.