Buying a home and keeping your home
FARMINGTON HILLS, MI (June 21, 2021) — June is National Homeownership Month. Homeownership has for years been synonymous with achieving the “American Dream.” The U.S. Census Bureau cites a 65.6 percent homeownership rate for the first quarter of 2021. However, rising debt, stagnant income, affordability, racial disparity and the recent housing shortage are some of the challenges many Americans face when purchasing and keeping a home.[1]
National nonprofit GreenPath Financial Wellness and Homeownership Preservation Foundation (HPF) are one of the nation’s leading housing counseling resources that helps millions of people manage the lifecycle of homeownership – be it renting, buying, maintaining, and staying in a home. With decades of expertise in homebuyer assistance, reverse mortgage counseling and foreclosure prevention, GreenPath is one of the most referred HUD-approved (U.S. Department of Housing and Urban Development) counseling organizations with 167 HUD certified counselors and housing experts specifically trained in housing programs. Since 2004, GreenPath/HPF with its 995-HOPE hotline has helped more than 9 million distressed borrowers. According to the Urban Institute, borrowers who received counseling during the 2008 crisis were nearly 3 times more likely to receive a loan modification and 70% less likely to re-default on the loan.[2]
Mortgage forbearance provided a lifeline for millions of homeowners during the pandemic. According to the Mortgage Bankers Association, an estimated 2 million homeowners are in forbearance plans as of June 14th. However, forbearance is not forgiveness. Borrowers will still owe the principal and interest that they didn’t pay during the forbearance period. As forbearance plans begin to expire (June 30th or Sept. 30th), now’s the time for borrowers to be proactive.
“Our homes are central to our overall safety and well-being,” says GreenPath CEO Kristen Holt. “GreenPath’s HUD-certified counselors help people begin a conversation about where they are today, and what they need to accomplish their goals. There are down payment assistance programs that can help people buy a home, and programs that can help people stay in their home such as forbearance. With the uncertainties of whether forbearance relief will be extended, we want to remind people they are not alone when it comes to figuring out what to do when relief ends. We can assess a household’s full financial picture, call the servicer with the borrower and create a customized action plan.”
Servicers typically try to contact borrowers a month before the forbearance ends. Borrowers should respond promptly to discuss repayment plans with their servicer and with a housing counselor like GreenPath, depending on the borrower’s ability to resume mortgage payments. The most common plan is to add missed payments to the end of the loan. Other options include: reinstatement (lump sum payment), intermittent payments, or combination of these.
The American Rescue Plan provides nearly $10 billion for states, territories, and Tribes to provide relief for the nation’s most vulnerable homeowners. Borrowers may be able to ask for a forbearance extension from their servicer, depending on when they entered the initial forbearance. Not every loan qualifies, and extensions are not granted automatically.
Holt adds: “Lenders and servicers have never before had to deal with mortgage forbearances on this scale, so borrowers should allow ample time to connect with them. Borrowers, if they can’t afford to resume their payments at pre-forbearance levels, will need to examine other options such as loan modifications, where they might need to change the terms of their mortgage to be able to make the payments. If the borrower’s home is truly unaffordable, there are alternatives to foreclosure like selling the home – an option worth considering since it is a sellers’ market right now.”
Tune in to GreenPath’s “Buying a Home in a Seller’s Market” webinar on Wednesday, June 23 at 1:00pm EDT. If anyone is concerned about finances overall, buying or staying in your home, visit 995hope.org or contact 888-995-HOPE (4673). Borrowers can also contact GreenPath at 866-648-8122 or visit www.Greenpath.org, which has many useful resources.
[1] https://www.aba.com/news-research/research-analysis/homeownership-in-america
[2] https://www.moneygeek.com/mortgage/resources/housing-counseling/
About GreenPath Financial Wellness
As one of the largest financial counseling agencies in the nation, for more than 60 years, GreenPath Financial Wellness has assisted millions of people with debt and credit management, student loans, homeownership, and foreclosure prevention. Headquartered in Michigan, GreenPath and its affiliates work directly with individuals and 580+ credit union, bank, retirement/insurance and employer partners across the U.S. from more than 20 locations and through phone access and online tools. GreenPath is a member of the National Foundation for Credit Counseling and is accredited by the Council on Accreditation. The GreenPath family of companies now include CONSUMER, Homeownership Preservation Foundation (995-HOPE), Clarifi, and Rural Dynamics, Inc. To learn more, visit www.greenpath.org or call 800-550-1961. Follow the nonprofit on Facebook and Instagram @greenpathfinancial and on Twitter @GreenPath.
