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Too many homeowners not fully using forbearance options

By Lew Sichelman

Despite lifelines thrown their way by Congress, the Urban Institute counts roughly 400,000 homeowners who are delinquent on their mortgages, but who have failed to take advantage of any payment forbearance programs.

Perhaps they fear being forced to make up their missed payments in one lump sum when they start paying again. Or maybe they don't understand the options available to them under the Coronavirus Aid, Relief and Economic Security Act. A poll by Fannie Mae found that 1 in 5 aren't even aware that help is available.

Whatever the reason, these people need to know their options. Sure, they can continue failing to make their house payments and eventually lose their homes. That's their choice.

But if they have a mind to, they can save their homes by asking their lenders - or the servicing companies that collect their payments and pay their property taxes and insurance - for some relief. Practically all you have to do is ask.

Under the law, borrowers who can testify that they have a financial hardship related to COVID-19 are eligible for help if their loans were purchased by Fannie Mae, Freddie Mac or Ginnie Mae. If you qualify, you can defer your payments for six months to start, and extend that another six months if you still need some time to get your financial act together.

And contrary to what nearly 70 percent of the people questioned by the National Housing Resource Center believe, you don't have to make up the missed payments all at once. Indeed, lump-sum repayment is just one option. You can stretch out the missed payments over time, add them to your loan balance or pay them when you sell or pay off your mortgage.

Meanwhile, the Urban Institute also reports that some 205,000 homeowners have not extended their forbearance after their terms ended in June or July - and are now delinquent on their loans.

Escaping to ... the UK?

Prior to the election, numerous Americans swore they'd be escaping to Canada if their candidate didn't win. But a good number of our wealthier citizens have already high-tailed it to the U.K. instead.

According to figures from Enness Global Mortgages, buyers from the States have accounted for 14 percent of high-end home sales in Britain so far this year. They trail only those from United Arab Emirates, who represented 35 percent of England's international buyers so far this year.

Enness doesn't say what constitutes "high-end," or whether these were permanent or vacation homes, but the average price paid by Americans was more than $4.7 million. (Impressive, but people from Malaysia paid more: just over $6.6 million, on average.)

Another interesting stat: The typical American down payment was a substantial 51 percent. Buyers from Nigeria didn't spend as much in total, but they put 72 percent down.

Meanwhile, foreign investment in U.S. housing is down 5 percent from a year ago, the National Association of Realtors reports. It was the second straight year for declining foreign investment. But even at that, foreigners still plunked down $74 billion to buy existing houses here over the last 12 months.

Chinese and Canadians were the most active foreign buyers, followed by Mexicans, Indians and Colombians.

Foreclosure takes time

Foreclosure isn't the instant process many people think it is. It takes time. How much time? That depends on the state.

If you can't pay your mortgage in Hawaii, it will take an average of 1,741 days - nearly five years! - before your lender can actually repossess your property, according to ATOM Data Solutions.

It takes almost as long in New Jersey and New York: 1,527 days and 1,423 days, respectively. In Florida, it takes 1,230 days. No wonder some people who can make their house payments don't do so - you can live for practically nothing in these states for four years or more.

Even in Virginia, the state with the shortest foreclosure timeline, it takes a full six months to remove a nonpaying borrower.

Climate check

If you're worried about the climate where you're looking for a new house, there's now an app for that. Just plug in the address and ClimateCheck.com will produce an extensive report telling you, among other things, the risk for storms, higher temperatures, drought, flood and fire. It will also give you an overall risk score.

According to the 34-page report I received, the overall risk score on my house is just 28. But my place is at a very high risk for storms - a small EF-1 tornado recently touched down about 500 feet away - and high risk for rising temperatures. The report is free, at least for now. (Full disclosure: ClimateCheck is headed by Cal Inman, who I've known for years; he's the son of Brad Inman, who operates a real estate-centric news service for which I wrote until recently.)

• Lew Sichelman has been covering real estate for more than 30 years. Readers can contact him at lsichelman@aol.com.

© 2020, United Feature Syndicate

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