Do you have to pay your mortgage under the new Coronavirus bill?

[hobie]

I just came across a snippet of news that under the "Coronavirus Aid, Relief, and. Economic Security Act'' or the ''CARES Act' you don't have to pay your mortgage for 90 days or can defer it for up to a year. Anybody come across that?

 

[hobie]

Here is USA Today..........

Homeowners hurt by COVID-19 can delay mortgage payments, but some say they're anxious and confused about the real cost

Americans struggling to pay mortgages because of coronavirus can postpone monthly payments. But confusing rules leave many anxious.

www.usatoday.com

 

[tango]

I just read an article about that, and saw a few other articles along the way. It sounds like there's little to no verification that the person who says they can't pay really can't pay. But I read another article that suggests using this facility can be very damaging to your credit rating, so it's worth considering whether you really need to fall back on it.

 

[JRT]

I just came across a snippet of news that under the "Coronavirus Aid, Relief, and. Economic Security Act'' or the ''CARES Act' you don't have to pay your mortgage for 90 days or can defer it for up to a year. Anybody come across that?

In Canada the mortgage can be deferred without penalty but still must eventually be paid.

 

[tango]

I think it's the same in the US - you can defer it but it just tacks the payments onto the end of the term. I'm not sure if interest is suspended during the payment break.

 

[hobie]

In Canada the mortgage can be deferred without penalty but still must eventually be paid.

Whoa, so there must be some more interest or 'penalties' hidden in there somewhere.

 

[tango]

Whoa, so there must be some more interest or 'penalties' hidden in there somewhere.

Not necessarily, all you're doing is skipping this month's payment and tagging it on to the end of the term. The question is whether it continues to accrue interest and whether your credit rating takes a hit for what is technically a non-payment of a loan instalment.

 

[JRT]

Whoa, so there must be some more interest or 'penalties' hidden in there somewhere.

I just found out today that there is. Recent legislation in Canada requires the banks to suspend mortgage payments up to six months on request. Sounds good but what the banks are doing is adding the interest portion of any missed payment on to the principle. This means that you will now be paying interest on the interest thereby extending the term of the mortgage. In the long term the bank loses nothing and actually benefits. Sweet deal! They look good but turn a profit. I regard this as a form of gouging and I hope that the government puts an end to it.

 

[tango]

I just found out today that there is. Recent legislation in Canada requires the banks to suspend mortgage payments up to six months on request. Sounds good but what the banks are doing is adding the interest portion of any missed payment on to the principle. This means that you will now be paying interest on the interest thereby extending the term of the mortgage. In the long term the bank loses nothing and actually benefits. Sweet deal! They look good but turn a profit. I regard this as a form of gouging and I hope that the government puts an end to it.

It really isn't gouging at all, it's merely continuing to apply the exact same terms and conditions as before but allowing you to skip a payment. One of my credit cards allows me to apply for a "payment holiday" where they don't require any payment at all but interest continues to accrue exactly as before.

It would be nice if you could skip payments without accruing any additional interest but the banks aren't going to allow that unless their hand is really forced.

 

[JRT]

"It would be nice if you could skip payments without accruing any additional interest but the banks aren't going to allow that unless their hand is really forced."

At a time when a huge swath of people are suffering financial loss and a great deal of stress and anxiety, it would be nice if the banks would voluntarily help share the suffering. If not then the government should force their hand.

 

[tango]

"It would be nice if you could skip payments without accruing any additional interest but the banks aren't going to allow that unless their hand is really forced."

At a time when a huge swath of people are suffering financial loss and a great deal of stress and anxiety, it would be nice if the banks would voluntarily help share the suffering. If not then the government should force their hand.

They are already helping people. Letting you skip a payment without adding the charges and fees they would normally add is helping. If you don't like the terms you don't have to take the payment break.

 

[psalms 91]

Some have no choice and the terms dont change. It is rather old this dont take something if you dont like the person or such. I agree that it would be a good thing if people with their backs to the wall already were forgiven a month or two on their mortgage but without the banks being forced to do it it wont happen.

 

[tango]

Some have no choice and the terms dont change. It is rather old this dont take something if you dont like the person or such. I agree that it would be a good thing if people with their backs to the wall already were forgiven a month or two on their mortgage but without the banks being forced to do it it wont happen.

Hey, why stop at forgiving a couple of months' payments? Why not force the hands of the nasty banks and make them forgive the entire loan?

Seriously, when do we stop expecting everyone else to cover the gaps in our own lives? It seems if the banks enforce the terms that people agreed to (which they have every right to do) they are the bad guys and if they cut people some slack they are still the bad guys for not cutting more slack. Did we really lose the ability to be thankful for being given something for free?

 

[psalms 91]

Seems to me that when people are hard up due to the fault of the government then perhaps a helping hand is warranted unless of course you are greedy

 

[tango]

Seems to me that when people are hard up due to the fault of the government then perhaps a helping hand is warranted unless of course you are greedy

If people are hard up because of the government perhaps the government should be helping rather than demanding someone else does the helping?

Of course if the government hadn't shut down most of the economy maybe we wouldn't be in such a mess in the first place.