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Defining Mortgage Relief

Apr 14
7:12
AM
Category | Mortgage Industry Updates & Announcements

It's important to know the different mortgage relief options so you can make the best choice. Take a look at some of the options here:

Forbearance
This is the plan everyone is talking about since the passage of the CARES Act. It’s an agreement with your lender to reduce or delay regular payments for a set time. When the forbearance period ends, the postponed payments will be due all at once. Learn more about Forbearance here.
 
Modification 
This is a legal process that alters the terms of your loan. For instance, a modification could lower your monthly payments by lengthening your loan term.
 
Deferment
This is a plan that allows you to postpone your payments for a set time then pay them at the end of your regular loan term. “Deferments” and “forbearances” are often used interchangeably, but they are different. A deferment is more beneficial for many because it eliminates the need to make up multiple payments at the end of a short postponement period. Deferments are not available from all servicers.
 
Payment Assistance Program
This is an arrangement that allows you to make up your postponed payments at the end of a forbearance period by spreading the cost over a period of time. Payment Assistance Programs are not available from all servicers.
 
Cash Out Refi or Home Equity Line of Credit (HELOC)

If you still have enough income to qualify, accessing equity in your home by refinancing or obtaining a secured credit line may be a good option for lowering your payments, consolidating other debts, and/or creating a cash cushion. A refi will be especially beneficial if current rates are lower than those on your existing financing. Learn the difference between a HELOC and a Cash-Out Refi here.

If you want to discuss your options for a refinance or HELOC, please contact us directly.

To set up the other options listed here, please reach out using the contact information on your monthly loan statement. Document all calls and agreements, then check your monthly statements and credit reports to assure that changes are reported correctly.

We hope this helps you understand the available options. If you have questions, please reach out.

Helpful Resources 

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Be on The Lookout for Coronavirus Scammers

Apr 9
2:08
AM
Category | Mortgage Industry Updates & Announcements
While most people want to help each other weather difficult times, there may be individuals who selfishly see disasters as an opportunity to profit. It’s important to be diligent and on the lookout for those trying to take advantage of these circumstances.
 
During this time, individuals may become aggressive in trying to gain sensitive personal information or collect donations for fraudulent charities. Be wary of any social media requests, texts, or phone calls related to COVID-19.
 
Here’s what you need to know about the most common types of scams and what you can do to protect yourself.
  • Robocalls: Hang up! Don’t press any numbers.
 
  • Online offers for vaccinations and home test kits: Ignore these offers. There are no FDA-authorized home test kits for the Coronavirus. You can visit the FDA website to learn more.
 
  • Text Messages/Emails: Don’t respond to text messages and emails about checks from the government. Anyone who tells you they can get you money now is a scammer.
 
  • Links from Unknown Sources: Don’t click on links from sources you do not know. This could download viruses onto your computer or device. Before clicking a link or sharing personal information online, stop, pause, and research the company or person. Make sure the anti-malware and anti-virus software on your computer is operating and up to date.
 
  • Donations: It’s important to do your homework. Don’t let anyone rush you into making a donation. If someone wants a donation in cash, by gift card, or by wiring money, don’t do it. The best way to donate money to help those affected by a crisis is to go directly to the charity’s website. For online resources on donating wisely, you can also visit the Federal Trade Commission (FTC) website.
 
  • Online Sellers: Know who you’re buying from when purchasing online. Online sellers may claim to have in-demand products, like cleaning, household, and health and medical supposes, when in fact they do not. Check online reviews of any company offering COVID-19 products or supplies.  Avoid companies whose customers have complained about not receiving items.
 
  • Emails: If you receive an email claiming to be from the Centers for Disease Control and Preventions (CDC) or experts saying they have information about the coronavirus be wary. For up-to-date information about the virus, you can visit the CDC’s website here.  Double check the actual email address. A government agency’s email address will end in .gov not .com. Even if you do believe an email is legitimate, always navigate to the organization yourself rather than clicking a link within the email.
 
Where can I find legitimate information about the Coronavirus?
It’s smart to go directly to reliable sources for information about the coronavirus. That includes government offices and health care agencies.
For up-to-date information on the developing situation visit Greenway's Incident Resource Center. 
 
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Mortgage Assistance During COVID-19

Apr 7
2:12
AM
Category | Mortgage Industry Updates & Announcements

The first priority of Greenway is the health and safety of our team members, clients and communities. If you are facing financial struggles related to COVID-19 that are impacting your ability to make your mortgage payments, please see the information below regarding new mortgage relief options:

Overview of The Coronavirus Stimulus Bill

  • Anyone facing a financial hardship from coronavirus shall be given a forbearance on a federally backed mortgage loan of up to 60 days, which can be extended for four periods of 30 days each.

  • The legislation says that services of federally back mortgage loans may not being in the foreclosure process for 60 days from March 18, 2020.

  • The bill also does not allow fees, penalties or additional interest to be charged as a result of delayed payments. It includes similar protections for those with multifamily federal mortgage loans, allowing them to receive a 30-day forbearance and up to two 30-day extensions.

Here’s What You Should Know:

Credit Reporting: Servicers must not report to the credit agencies a Borrower who is on an active forbearance, repayment, or trial period plan due to COVID-19 related hardship.

Forbearance Plans (a temporary pause of your mortgage payments): Servicers may approve forbearance plans for all Borrowers who have COVID-19 related hardship, regardless of property type.

Loan Modifications: Servicers must conduct Modifications on Borrowers impacted by COVID-19 related hardship as long as the Borrower was current as of the date of the national emergency declaration on March 13th, 2020.

Foreclosure: Servicers must suspend all foreclosure sales for the next 60 days. Note this does not apply to properties that are vacant or abandoned.

 

The Forbearance Process Explained

 

Continue to Make Your Mortgage Payments

Forbearance does not mean your responsibility to pay is waived. It is not a deferment. This is one of the most misunderstood parts of the process. At the end of the three months (or whatever number of payments is granted by the servicer), you must pay that month's payment, plus what is owed. This is usually due in one lump sum, or possibly extra payments over time.

Contact Your Servicer

If you’re concerned about making your mortgage payments due to job loss or reduction in hours, please reach out directly to your servicer ( the lender you make a payment to every month) to get more details on the forbearance policy and to find out how you can negotiate payment terms that will meet your individual needs.

Once the time frame is up, your servicer will work to reevaluate your situation to determine the best course of action. If you’re ready to resume payment, they will move toward payment options.

Keep checking back! This is a fluid situation, so we will post updates for you as we get them
 

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Tax Day Deadline: Important Changes

Apr 2
1:30
AM
Category | Mortgage Industry Updates & Announcements
You may have heard that the IRS will be extending the deadline to file your 2019 tax returns. The IRS says individuals and businesses can delay filing and paying federal tax bills for 90 days, to July 15th from April 15th, as part of an emergency relief plan amid the COVID-19 pandemic.
 
This relief is automatic, taxpayers do not need to file any additional forms or call the IRS to qualify. Learn what this decision means and whether it’s worth waiting.
 

What Does This Mean For You?

  • Americans who choose to push back their payments with not be penalized, nor will they be charged interest on late payments.

  • If you’re likely to receive a refund and are able to submit your return on time, don’t wait to file. The funds that you receive could be useful in the coming weeks and months, especially if COVID-19 has impacted your financial well-being. 

>>Tip: To make the process fast and safe as possible, the IRS advises taxpayers to utilize e-filings and select direct deposit as their preferred method for receiving refunds.

 

Why You Shouldn’t Wait to File Your Taxes

  • Unless you owe a lot of money, it’s inadvisable to wait as you will have to pay them eventually.

  • Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020. You will automatically avoid interest and penalties on the taxes paid by July 15, 2020.

 

What If You Can’t File by July 15, 2020?

  • For those who can't file by the July 15, 2020 deadline, the IRS reminds individual taxpayers that everyone is eligible to request an extension to file their return (October 15, 2020).

  • This October extension is not new. It’s available to tax filers every year, but it doesn’t extend the deadline for tax payments. 

 

Bottom Line:

Just because you can wait until July 15th, 2020 to file your taxes doesn’t mean you should. If you’re able to file your taxes and are expecting to receive a tax refund, you should take the time to submit your returns sooner rather than later. The refund money you receive could be beneficial to you financially.
 
Stay Up-To-Date on what's happening by visiting Greenway's Incident Resource Center. 
 
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FICO Launches New Credit Scoring Model (FICO 10): What does this mean for your mortgage qualification?

Feb 18
6:02
AM
Category | Mortgage Industry Updates & Announcements
 
FICO Launches New Credit Scoring Model (FICO 10): What does this mean for your mortgage qualification?
The short answer: Nothing. While the FICO 10 scoring model is being rolled out this year, most mortgage lenders will not utilize this version for qualification for some time. Read on for full details.
 
FICO 10 Credit Scoring Model
Just recently announced, FICO is launching a new scoring model coming summer of 2002. This new model is called FICO Score 10. It will take into account a consumer’s account balances and missed payments over the last two years.
 
With these new changes, many Americans will likely see their credit scores change this summer. The new approach now incorporates consumers’ debt levels, taking into account account balances for the previous 24-plus months, while prior FICO scores focused on more recent account balances.
 
Are you at Risk?
The newer model can put borrowers with late payments on their records at a disadvantage. In addition, consumers with a history of high utilization ratios (the amount of credit you use vs. what you have available) will also see their scores drop. However, for borrowers with already good credit, the new model will likely provide a boost. On loans and mortgages, it could even mean additional saved on interest and fees (again, when lenders start to use it)!
 
Overall, this scoring model is deemed to be more accurate. It is better for consumers because there’s many who aren’t getting the credit score, they deserve. For example, if someone has a 690 but really should have a 700, they’re missing out on lower fees and rates that they higher credit score would get them.
 
What Can You Do To Improve Your Credit Score?
  • Try to pay off your credit card balances early, even before their monthly due date.
  • If you are already a homeowner, stay on top of your monthly mortgage payments.
  • Reduce your spending where possible
Will Lenders Use This Model?
Lenders will most likely not see these scores in practice in the mortgage industry for several years to come. Currently Freddie Mac and Fannie Mae only approve one FICO score model and it is the one which was created in 2004.
 
New score models were created over the years including FICO® 8, FICO® 9 and FICO® 10. Until Fannie Mae and Freddie Mac approve the use of different models, lenders must use the model they deem appropriate/approve. Per FICO® - “Updates incorporated in new releases (FICO® Score 8, 9, etc.) do not impact the older models”.
 
Credit Basics Are Still Important
 
Payment History
The factors that FICO looks at to calculate your score overall aren’t changing with the new model. Payment history will still make up about 35% of FICO scores. So, paying your bills on time (and in full) remains crucial to getting a good score.
 
Total Amount You Owe
Around 30% of your FICO credit score is based on the total amount you currently owe, and that’s still true under FICO 10. Keep your balances as low as possible! Do not use more than 30% of your available limit with products like credit cards.
 

 

After the two factors mentioned above, the length of your credit history, your mix of loans and the new accounts you’ve applied for recently, remain important to calculating your credit score.

Checking Your Credit Score Online

When consumers go online and receive their scores’ they must review which scoring model they are receiving. Consumers could get a Vantage Score, a whole different scoring model. They most likely will get a FICO® model score but must verify the version. The difference in score versions provided can have a consumer find a variance of 30-90+ points from lender accessed scores. Keep in mind, Credit Karma uses Vantage, which can render significantly difference scores than used for mortgage qualification.

Online scores are good to gauge where your scores sit, but only a lender can provide the true FICO® lending score used for decision making. Scores are obtained when the credit bureau information from Experian, Equifax and Transunion is evaluated by the FICO® model score. This is a snapshot at the time the credit report is pulled. It is a lender guideline to use the middle score. For example, a 650 – 690 and 675 score would result in the middle score being a 675.

Bottom Line

Instead of getting hung up on which model a lender may use, it’s important to practice fundamental good habits such as paying bills on time and keeping your debt low. If you’re thinking about buying a home, get to know your credit score better and how to improve it! Learn more here. 

Give Greenway Mortgage a call to discuss your credit score in detail. There are many different ways we can help. 908.489.4658. 

Important Resources

 

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