What to do when you lose your job in Nashville may be your biggest concern as we live in uncertain times. If you are one of the thousands that lose your job in Nashville or Smyrna or Nolensville? Covid-19 has decimated our economy, caused millions to lose their jobs or receive indefinite furloughs, and forced over 100,000 small businesses to close their doors forever, about 2% of all small businesses. Restaurants are hit even harder, 3% of the restaurants are gone. It is a frightening time. In this article, we will give you options including how not lose your house to foreclosure and use unemployment forbearance mortgage.
Job Loss in Tennessee in 2020
Jobs are scarce, unemployment is over 11% in Tennessee, way, way up from historic lows earlier this year of 3.3%, and nationwide unemployment is a staggering 13.3% or 20,544,000 claims for unemployment. During the Great Recession unemployment nationwide was 10% at its peak in 2010. Today over 350,000 Tennesseans are without jobs. Are you one of those people?
If you are reading this and you have or may lose your job, you have reason to be concerned. What to do when you lose your job if you are a homeowner? You may be faced with the difficulty of making your regular monthly mortgage payments. Even unemployment benefits may not cover some or all your mortgage payments and still have money to put food on the table.
Depending on your circumstances, you may have some viable short-term mortgage payment options to carry you over until times get better. One option is unemployment forbearance mortgage.
A mortgage forbearance agreement between the borrower and the lender temporarily suspends or lowers debt payments for mortgages as well as student loans. Unemployment forbearance mortgage is currently 8.16%, affecting 4.1 million homeowners with federally backed mortgages – Ginnie Mae loans which are insured by FHA (Federal Housing Authority) or VA (Veterans Administration) and Freddie Mac.
Unemployment Forbearance Mortgage
Unemployment forbearance mortgage is more than double the historic 20-year low of foreclosures or 3.8% that peaked in February 2020. The new mortgage forbearance CARES Act of 2020 has extended forbearance aid for up to 12 months. Mortgage forbearance will not have a negative effect on your credit score if your lender agrees not to report it to credit bureaus!
This is very painful, almost unthinkable, how our economy and jobs have collapsed. It has left thousands upon thousands of Tennesseans in the dust faced with limited options. Unemployment mortgage forbearance will help some people for a few months. Those without jobs with little to no prospects for new employment will struggle the most.
What does one do if they can no longer make their house payments and the unemployment mortgage forbearance is near exhausted? To make the situation critical, just be late one or two months in house payments. Some people have savings and in periods like this, those savings can disappear at a fast pace. Dave Ramsey has stated for years people need 3 to 6 months of emergency funds. This is one of those times. But once unemployment benefits, mortgage payment reductions, and savings are expired, what does a homeowner do? Options are dire at this point unless a new job can be had.
If you are in this situation and you are already behind a month or two in mortgage payments, you have a severe problem. If you are fortunate in keeping your house payments current but have no remaining reserves and no prospect of a job, you too, are in a difficult situation.
Don’t Lose Your House to Foreclosure
What is the worst thing that can happen to you right now? You could lose your house to foreclosure. Walking away from your house as it goes to the auction block is a horrible experience. Everything you have worked for and saved for is gone in a matter of 3 to 4 months. Foreclosure is not an option to be considered, period! Please, please don’t lose your house to foreclosure. You do not want to give your house back to the bank. We have options for you below!
Notice of Default
What foreclosure does to your credit is horrible. Once you get the dreaded Notice of Default for missing a mortgage payment, your situation is reported to the credit bureaus. If you give your house back to the bank, your credit rating immediately drops 80 to 150 points! You are now forfeited from buying another house for several years too. Please do read our important article “How to Stop Foreclosure in Nashville.”
When All Else Fails – Sell!
What to do when you lose your job in Nashville and prospects for another job are slim? Maybe the best solution is to sell the house as quickly as you can. This means to sell as soon as you see your job prospects are poor and you know you cannot keep making regular payments on your mortgage. Sell while you can get the most out of the house before the housing market turns more negative with houses being dumped to stop foreclosure. Our article “Can You Still Sell Your House During the Coronavirus Pandemic in Nashville” may guide you on deciding to sell your house.
This is a difficult decision to make for sure. It’s your call. You decide before you are forced to give your house back to the bank. If you wait in hopes a miracle will happen, then the pressures of fast liquidation will overcome you with fear. Don’t wait to decide later. Take action now and this will give you a sense of freedom and knowledge that you made a good and sound decision instead of one under worry, duress, and pressure.
A Real Estate Agent Is An Option
So how do you sell a house quick enough to bypass late payments and foreclosure? If the house is in good condition and you have a couple of months to sell, then a real estate agent might be good option. This can take time to prepare your house, list it, and sell the house in the retail market. Consider a minimum of 30 days if your house is remarkable, but 60 days is not unusual. You will need a very good real estate agent to really market your house to find you a buyer and get you the most money for a fast sell. You need to close on your house as quickly as you can to beat the foreclosure clock. Remember you may only have 30 to 60 days to get this accomplished before the mortgage company sends your file to a third-party foreclosure attorney. Do keep in mind you will probably have repairs to make to please the buyer. Also real estate agents charge commissions, fees, and there will be closing costs you will be responsible for a closing.
Sell Your House to a Professional Home Buyer
Another option is to sell your house to a local professional home buyer or investor. Investors, like ourselves at Southern Homes Investments, help people like you out of difficult situations. We can buy your house even if it needs repairs while giving you cash at closing and close as little as 7 to 10 days. This gives our clients a huge relief of mind and a sense of freedom to unload their house. We can help you not to lose your house to foreclosure.
We hope we have answered your question about what to do when you lose your job in Nashville. Be proactive and sell your house on your terms and not the banks. Don’t give your house back to the bank! Don’t lose your house to foreclosure. Give us a call at 615-500-4466. We would like to speak to you about your situation. Yes, we have stopped foreclosure for clients, but don’t let it go that long, it can get very nerve-racking. It doesn’t matter if you live in Columbia or Springfield, Clarksville, or Murfreesboro or any points in between, we are interested in helping you. Please do check us out at our website at www.SouthernHomesInvestments.com. Call us at 615-500-4466 or fill out the form at the bottom. Southern Homes Investments buys, renovates, rents, and sells houses.
Disclaimer: David Wright is a licensed real estate agent in Tennessee and this article is not a solicitation to list your house.