For first-lien residential mortgage loans:
How do I request a COVID-related forbearance?
Just ask and certify that your current financial hardship arises from the COVID-19 pandemic. We will not require you to submit any documentation if you have a federally-backed mortgage loan (see below).
Who should request a COVID-related forbearance?
Under the federal CARES Act, you are eligible for assistance if you have a federally-backed mortgage loan and are experiencing a financial hardship due, directly or indirectly, to the COVID-19 emergency. For example, you may be subject to a COVID-19 financial hardship if you or your spouse has lost employment due to the crisis. You will be required to affirm that you are experiencing such a hardship. You will not be required to provide additional documentation.
Federally-backed mortgage loans include FHA, VA, and USDA-backed loans, as well as loans owned by Fannie Mae. If your loan is not federally-backed, we may have other relief options we can offer you if you request assistance.
If you can afford to make your mortgage payments, please do so. The relief offered is not payment forgiveness, and interest will continue to accrue while you are not making payments. The longer you put off making payments now, the more difficult it may be to bring your payments current later. The time-period for which you are eligible for payment relief is limited, so you should not ask for assistance before you really need it. We encourage borrowers to start with a 3-month (90-day) forbearance period, and not go longer until they know they need it.
Those with federally-backed mortgage loans subject to the CARES Act are eligible to request up to six months (180 days) of payment relief, with the possibility of requesting up to an additional 180 days if they can affirm their COVID-19 financial hardship continues. We strongly recommend against suspending your payments beyond 90 days unless you really need it. Again, any payments you skip are not forgiven. They will need to be paid later and interest continues to accrue on the unpaid loan balance.
What is a CARES Act forbearance?
A CARES Act forbearance, like any other forbearance, is an agreement by a lender to allow a borrower to make lower payments, or no payments, for a period of time during which the lender agrees not to pursue collections or foreclosure as long as the borrower abides by the terms of the forbearance. In the case of COVID-19 relief under the CARES Act, borrowers with financial hardships due to the COVID-19 emergency are entitled to a forbearance period where they don’t make their mortgage payments at all. However, interest continues to accrue on the unpaid loan balance, and any skipped payments must be paid, and the loan brought current, at the end of the forbearance period. If you are unable to bring your loan current all at once, which is not uncommon, you are encouraged to apply for further assistance. If you apply and are approved for further assistance, alternative options, such as short-term repayment plans or permanent loan modifications, may be available.
The payments you skip during a CARES Act forbearance period will not be reported as delinquent, in accord with the CARES Act. Any payments that were delinquent prior to entering into a CARES Act forbearance will continue to be reported as delinquent.
What happens when the forbearance period ends?
When your forbearance period ends, the payments you skipped during the forbearance need to be paid. Generally, there are three types of options, and we will work with you to determine your best solution. For any option other than the lump-sum payment, you must apply for further assistance and qualify. Not all borrowers will qualify for post-forbearance assistance.
Lump-Sum Payment: If you can afford it, the simplest thing to do is make a lump-sum payment of the total amount of all skipped payments and bring the loan current. Then you resume your regular monthly payments according to the terms of your loan documents.
We understand that many borrowers will not be able to pay in full, so there are other options if you apply, qualify, and are approved.
Repayment Plan: The second option, if you apply for it, qualify, and are approved, is to make the skipped payments over time under a short-term repayment plan. With this option, you make your regular mortgage payment each month plus an additional amount that goes toward the skipped payments from your forbearance period until all of the skipped payments are satisfied.
Loan Modification: If you apply for it, qualify, and are approved, we might permanently modify your mortgage loan to add the amount of your skipped payments to the principal balance owed on your loan, which allows you to pay the skipped payments over the entire remaining term of your loan. A loan modification may involve extending the term of your loan, if necessary, to keep your payments affordable. For FHA loans, an interest-free loan for the overdue payments may be available from the Department of Housing and Urban Development (HUD). This loan does not have to be repaid until the first mortgage is paid off or refinanced, or you no longer occupy the property, such as when you sell the home.
Deferral: A deferral is a type of loan modification. If you apply, qualify, and are approved, this repayment option lets eligible homeowners defer unpaid mortgage payments related to a COVID-19 hardship. Those payments become a non-interest-bearing balance. The balance is either due at the maturity date or earlier upon sale or transfer of the property, refinance of the mortgage loan, or payoff of the mortgage loan. In some cases, the loan term may be extended to allow you to keep making regular payments toward the deferred balance.
You may be able to extend your forbearance period, if necessary.
We encourage borrowers start with a three-month (90-day) forbearance period, and not go longer until they know they need it. Those with federally-backed mortgage loans subject to the CARES Act are eligible to request up to six months (180 days) of payment relief, with the possibility of requesting up to an additional 180 days if they can affirm their COVID-19 financial hardship continues. We strongly recommend against suspending your payments beyond 90 days unless you really need it. Again, any payments you skip are not forgiven. They will need to be paid later, and interest continues to accrue during the forbearance period.
Bank of the West provides translation services, free of charge, through a third-party vendor for borrowers who speak in languages other than English. This service helps borrowers with general questions about the assistance options available and the process for requesting assistance. To use this service, please call us at 1-800-545-8180 (TTY: 1-800-659-5496).
Borrowers must provide their own qualified interpreters in order for the Bank to discuss the terms of any specific request for assistance. The Bank is not able to provide a translation of written communications.
New York City residents: A translation and description of commonly-used debt collection terms is available in multiple languages on the website of the Department of Consumer Affairs, www.nyc.gov/dca (tip: search “glossary”).
Important Notices and Disclosures
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