04/01/2020
About your mortgage payment - family cash flow and expense planning
We are in uncharted territory. The problems related to the COVID 19 and stay at home orders have developed too fast for most to put together a plan. While I don't have a overall plan for you, I can provide some input on handling your mortgage payment.
For most families, the mortgage payment represents their largest monthly expense. If your income has been substantially reduced and you are not going to get sufficient relief through unemployment benefits and Federal programs, your mortgage payment could be a problem. Here are some things to consider:
1) Prioritize your family household expenses and set aside enough money to pay all critical expenses - food, medical insurance and medical expenses, ect. - before you allocate money for your mortgage.
2) This happened fast and you may feel unprepared. I assure you, your mortgage lender is less prepared than you are. Policies on how lenders will handle borrowers facing hardship will be a moving target, at least for a while. So, when a customer service agent tells you over the phone what their "policy" on hardship is, DO NOT accept that at face value if the policy does not provide you with the help you need. Do not take no for an answer. Ask to speak with a supervisor.
3) Very important. If you contact your lender for help, always do the following:
a) note the day, date and time of the call, and the specific number you called.
b) note how long you were on hold, and if you were transferred note that as well
c) note the name of every person with whom you spoke
d) get an email address for anyone that makes a promise or commitment to you. Detail the promise or commitment, and send a confirmation email
e) if you end up calling your lender multiple times, keep a log of all calls
4) It seems likely the Federal Government is working on several different programs to put money in the pockets of Americans who need help, but until you have the money you can't use it. Unless you have a comfortable cushion, think hard before paying expenses like your mortgage that are not critical.
5) It is likely that missing a mortgage payment will do some damage to your credit, so that has to be factored into the equation, but this is a nationwide problem and our economy will need healthy consumers when this is over. I think it is also likely that the unique circumstances will be accounted for when it comes to credit files when this is over.
I worked with hundreds of mortgage borrowers between 2006 and 2009 and spend untold hours on the phone with lenders trying to resolve mortgage issues for families facing hardship. I traveled to Arizona, Texas, Nevada and Washington D.C., to meet with mortgage company executives to find answers. Here is what I can tell you, your mortgage servicer is working on policies to protect themselves and not to help you. Sad but true.
