CARES Act: Homeowners can delay mortgage payments, but will be required to pay lump sum
PHOENIX - If the thought of having your mortgage payment waived sounds like a great deal, this isn't a story you'll want to hear.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was passed in March, allows for a three to six month delay in mortgage payments.
Trying to save the roof over your head. That's on the minds of millions right now. The COVID-19 crisis has forced people out of work and forced them to make tough choices.
"People want to pay their bills, they want to pay for their homes, but if you absolutely have no jobs and it comes between food and your mortgage, you have to put food on the table," said Tamra Zinn, a homeowner.
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Zinn, a local designer whose business is in decline, hoped to take advantage of the CARES Act. It allows homeowners to put off paying their mortgage for three to six months or more.
She was stunned to learn that at the end of the grace period, she would be required to pay the entire lump sum.
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"Nobody expects it for free, but put it towards the end of our loans versus expecting people who haven’t worked for months to come up with it all of sudden out of thin air.. it logically makes absolutely no sense.”
We took Zinn's dilemma to mortgage banker Jeremy Schachter.
"I think this act honestly, is going to evolve. It happened so quickly, just because so many people were out of work and unemployment rates are skyrocketing that they had to put this out there just to give some relief," he said.
Advice from Schacter: sit tight, pay your mortgage if you can and stay in contact with your lender.
Zinn says she hopes banks will find a way to be more flexible with homeowners in trouble.
"The government bailed out banks in 2008 and they still took homes. I thought it was their time to bail out the people."
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