Coloradans Urged To Talk To Their Lenders If They're Having Trouble Paying Their Mortgage

DENVER (CBS4) - As many Coloradans now face a financial hardship battle as mortgage payments are due, a finance professor at Metro State University of Denver is hoping to help people with questions.

"Each situation is different so, for that reason, it is important for each borrower to contact their lender to see what their particular situation is," said Dr. Alex Fayman from MSU Denver. "Make sure you have a clear picture on how that money is going to be repaid by you to the bank. Because again, it's not going to be a gift, you will have to repay it."

Each mortgage company, bank, and loan owner may have different guidelines, but during the pandemic Fayman believes there will be an opportunity for more grace and leeway with borrowers. Fayman says after the Great Recession, many banks realized mass foreclosures actually cost more than working with borrowers to keep them in their homes.

"Meeting the borrowers half way, considering especially this systemic event that is taking place, I think it benefits everyone," he said.

The most likely outcomes of forbearance are an extension to the term of the loan, adding up to three months to the end of the loan. Some banks may ask for balloon payment after a few months, meaning a large lump sum could be required to get the account back into compliance.

"You might have to make as many as four payments at once in three months times, that's why it's so important to contact your lender to see what those terms are," Fayman said.

Sometimes a borrower may need to go beyond the mortgage company or bank and try to contact the owner of the loan directly.

"Understand clearly what your options are," he said.

He says this advice of communicating with a person responsible for your debt could also apply to credit cards and car payments.

"If you're struggling to make that payment, even if you have made that payment but you're worried what those options are down the line, I would not hesitate and pick up the lender and speak to a person," Fayman said.