Coronavirus help and jumbo mortgages: can you suspend payments?


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Millions of Americans have suspended mortgage payments – but relief guidelines are less clear for people with more expensive pillows and jumbo loans.

A jumbo loan is a loan that exceeds local compliance limits set by the Federal Housing Finance Agency, which means it is too large to be purchased by Fannie Mae and Freddie Mac. This usually indicates that the loan is over $ 510,400 in most areas (although the threshold is higher in high cost areas).

These loans, often used to buy more expensive homes, are considered risky because they cannot be sold to Fannie and Freddie.

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People on conventional loans were offered the option of entering into forbearance agreements – temporarily withholding payments for up to one year – as a form of relief under the CARES Act. Many Americans have taken advantage of this assistance. In fact, about a month after the national lockdown began, nearly 3 million Americans were in abstention.

However, support for homeowners with jumbo mortgages was not specifically addressed in the back-up plan as they are not supported by government sponsored entities.

“Giant lenders don’t have to offer forbearance, unlike conventional and government-guaranteed lenders,” Holden Lewis, a mortgage expert for Nerdwallet, told FOX Business.

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But if you find yourself in a situation where you don’t think you will be able to make full payment, contact your service agent immediately, Lewis advised.

Before calling, Lewis said you want to be clear on what you are asking for. This means you need to know how long you won’t be able to make full or partial payments.

And be prepared to hand over the proof.

“The duty officer will likely want documents to support your claim, such as pay stubs, recent bank statements – anything you have that can document your income interruption,” Lewis said. “Be prepared to give an updated list of assets, including savings and investments. You can be expected to dip into your savings.

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Meanwhile, data from Redfin shows jumbo loans have been hit hard during the pandemic as mortgage agents tighten their lending criteria – some lenders have even stopped issuing them altogether. Jumbo loans fell 37% in March, compared with a 2.7% drop for conventional loans.

“COVID-19 has had a significant impact on the lending industry in many ways over the past few months and jumbo loans were one of the first products to take off the shelves,” said Redfin Mortgage Advisor Katie Bradner , in a press release.

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