Lenders (Banks and mortgage only lenders) are receiving a huge amount of calls/emails/requests (google: “Your Lender Name” COVID 19 and most if not all have an online form to complete or contact email address or phone number) daily from customers who are looking to defer their mortgage payments and have guidelines they are following, and not all requests for payment deferrals are being approved. The most important thing individuals have to realize is that lenders are not offering "payment or interest forgiveness". You are still responsible for your payments and accrued interest if lenders agree to temporarily defer your payments, which is currently 1 to 6 months. With the amount of inquiries lenders are receiving, you may have difficulty actually speaking with someone right away but keep trying, especially if you are not able to make your next mortgage payment because if your mortgage is not flagged in their system, the late payment may show up on your credit bureau. Lenders are able to avoid this from occurring so discuss this with them as well. Based upon my experience, be prepared when you approach your lender and contact them.
Some things you should do or prepare when contacting your lender:
1. While your name is important, ensure you have your mortgage statement at it will have all the information the lender may require, including your name, address and mortgage number. Due to privacy policies, lender will not discuss specific products with non-clients (including mortgage brokers)
2. Let them know what you want - full or partial payment deferral and for how long.
3. Provide the reason why you are requesting mortgage payment deferral. Could be for the following reasons:
i) loss of employment income ii) reduced income/hours iii) loss of rental income iv) self-employed-business closure or reduced income. Do not focus on other debts if at all possible. Lenders will not/should not pull a new credit bureau. The majority of reasons why individuals are requesting mortgage payment deferrals is due to a reduction in income. If your employer has provided any documentation to confirm loss of employment mention that when speaking with your lender (ie; Record of Employment or letter confirming temporary or permanent lay-off).
4. They may ask if you have any additional savings. You can say you do but indicate you require for every day expenses since government benefits are not enough to replace the income lost.
5. Mention that you have or will be applying for whatever government benefits are available. Lenders want to know you have a plan in place in receiving income from non-employment sources.
6. If the mortgage is for a rental property, let the lender know that the tenant is not able to pay their rent but that you have discussed with them and they will be applying for government benefits.
7. If you are on weekly, bi-weekly or semi-monthly payments, consider changing temporarily to monthly payments for easier budgeting.
8. If you are in a variable rate mortgage, ask if the payment can be lowered to account for the lower rate since Prime at some lenders is 1% to 1.50% lower than they were a few weeks ago.
If you are approved for mortgage payment deferral, expect an initial 1 or 2 month deferral as the lender may want to re-evaluate your situation at a later date. Even if you have had payment issues or previous deferrals in the past, you can still be granted payment deferrals during this time but it is up to the lender, not the government. Not every request will be approved and lenders will require information relevant to them in order to make a decision.
