This post was originally published on this site

Posted on March 20th, 2020

Here comes the mortgage assistance! I honestly thought I wouldn’t be writing about this sort of stuff anytime soon, but here we are. It feels like 2009 all over again.

As previously blogged about, all the major housing agencies have pledged to help homeowners affected by the coronavirus, including Fannie Mae, Freddie Mac, HUD, USDA, and the VA.

Now individual banks and mortgage lenders are stepping up to the plate to help those affected. Good on them.

Bank of America Offers Mortgage Deferment for Those Affected by Coronavirus

  • Bank of America will defer mortgage payments for an unknown period of time
  • Company is doing so on a case-by-case basis, may need to prove hardship
  • Deferred payments will be added to the end of the loan
  • Unclear if interest will be charged during deferment period

First up, Bank of America is offering deferment on basically all loans and credit cards, including mortgages and home equity loans/lines.

The caveat is that the mortgage or home equity loan/line must be held on the bank’s books.

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So if you make mortgage payments to Bank of America each month, as opposed to some other loan servicer, you might be eligible for assistance directly from them.

Additionally, you need to make the request, they aren’t just freezing mortgage payments for all customers in advance.

This appears to be on a case-by-case situation as well, which they said is how they’ve approached things in the past during other natural disasters or the semi-recent government shutdown.

In terms of how the mortgage deferment will work, the bank said deferred payments will be added to the end of the loan.

So it doesn’t appear as if you’ll have to pay back the deferred amount once payments resume, either via a lump-sum payment or by increasing subsequent monthly payments until the missed amount is repaid.

Instead, you’ll wind up with a longer loan term or perhaps a balloon payment. One gotcha here is that the bank may continue to charge interest during the deferral period.

However, there won’t be any negative credit bureau reporting for clients currently up-to-date on their payments.

Bank of America is also pausing foreclosure sales, evictions, and repossessions.

Ally Home Coronavirus Mortgage Relief

  • Ally Home is offering deferred mortgage payments for up to four months
  • Interest will accrue will payments are deferred
  • Unclear how the deferred amount and interest are to be paid back
  • Ally Home Loans Customer Care can be reached at 1-866-401-4742

Then we have Ally Home, which has offered to defer payments for up to 120 days for existing mortgage customers.

While no late fees will be charged, interest will accrue. It’s unclear if the missed payments will be tacked on to the end of the loan, or repaid differently once the forbearance comes to an end.

Again, you are going to have to reach out to them instead of expecting a sweeping motion for all mortgage customers.

Be sure to get all the details of the deferment to ensure it makes sense for your situation, including credit score impact, how it’s paid back, and so on.

Also note that you may need to provide documentation to prove you’ve been adversely affected by the coronavirus.

Chase, Citi and Wells Fargo Mortgage Relief Options

  • Both have mentioned that mortgage assistance is available
  • But neither have rolled out plans specific to the coronavirus outbreak
  • The Chase mortgage assistance phone number is 1-800-848-9380
  • The Wells Fargo phone number for mortgage payment issues is 1-800-678-7986

Citi has a notice on its website telling customers there are “a range of hardship programs through our service provider, Cenlar FSB.”

You can contact Cenlar at 1-800-2CENLAR (1-800-223-6527) Monday to Friday from 8:30am – 8pm ET and Saturday from 8:30am – 5pm ET.

This doesn’t appear to be unique to the coronavirus outbreak, but rather their ongoing hardship assistance program.

Wells Fargo and Chase haven’t formally offered specific coronavirus mortgage relief, but both have mentioned assistance being available and both have pages (Chase, Wells) dedicated to mortgage forbearance.

My assumption is they will offer better options than the generic ones listed on their websites, given the current situation is not anyone’s fault. And it’s also extraordinary.

In summary, be sure to understand the terms of any mortgage assistance, the impact on your credit (if applicable), how and when you’re expected to pay back any deferred amount, and so on.

While it might be tempting to get a mortgage break, there could be financial consequences.

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About the Author:

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for nearly 15 years.