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AZ mom: Foreclosure a threat despite COVID-19 forbearance

Confusion over COVID-19 mortgage help
Posted at 7:09 PM, May 05, 2020
and last updated 2020-05-06 10:42:23-04

PRESCOTT VALLEY, AZ — Weeks without a paycheck has put many Arizonans behind on their mortgage.

Roselynn Farrell of Prescott Valley says she one of them. The mom of four is furloughed from the dental office where she works and says she doesn't want to chance going into work any way since one of her sons has an underlying condition that put him in the hospital three times in March.

"It's a scary situation for us," she said.

Despite the stress, she and her husband thought their mortgage was taken care of.

"A conversation I had with the rep was my loan was going to get deferred for three months. I was gonna start making payments June 1," she said. "With no balloon payments, no late fees."

She says she was told the missed payments would be tacked on the end of her loan.

But this past Sunday morning she got a rude awakening.

"I open my front door and I saw a hand written letter with my name on it, no stamp." She said the letter was from her mortgage company.

Roselynn provided ABC15 a copy of the letter. It began "Dear Homeowners, your mortgage payment is now 60 days or more past due and your loan may be referred to foreclosure."

"(I'm) thinking this must’ve been something they accidentally sent out," she said. It wasn't.

Instead she says a representative from Shellpoint Mortgage Servicing told her, "because I have a particular FHA loan they said I wasn’t eligible for the deferment."

That meant March, April, May and June would due in one lump sum on June 1.

"The average American just doesn’t have that sitting in their wallet," she said.

A company spokesman sent a statement to ABC15 saying they couldn't comment on a particular customer's account but, "Each homeowner’s situation is different, and we are dedicated to working with each homeowner in forbearance to find the best possible solution for the homeowner at the conclusion of the forbearance period."

According to the US Department of Housing and Urban Development (HUD), as of April 17 FHA loans like Roselynn's are supposed to have several options including:

-COVID-19 National Emergency Forbearance that can temporarily suspend monthly mortgage payments

-Deferment or lowering of monthly payment for up to 12 month

-Repayment plans

-COVID-19 Standalone Partial Claim which is essentially a no-interest second loan for the missed payment that are tacked on to the end of the loan.

Roselynn says the company called her twice after we spoke on Tuesday. She says the first offered to extend the due date for the balloon payment to July.

Just before our story airs she said she received another call saying she was eligible for the COVID-19 Standalone Partial Claim.

Roselynn isn't sure what to believe so she is checking with loved ones to see if she can borrow enough money from them to make the lump sum payment.

"I have a lot of family and it’s just something that’s gonna have to be done. This house cannot be foreclosed on. But the amount of shame that I have, the embarrassment to execute this plan. It’s high," she said.