How Mortgage Grace Period Affects Association Dues
Q: Do mortgage forbearances that banks are offering apply to condo and homeowner association dues? Alice, Cresskill, NJ
A: At the end of March, NJ Governor Murphy announced that Citigroup, JP Morgan Chase, US Bank, Wells Fargo and Bank of America agreed to a 90 day grace period due to the COVID-19 epidemic, where borrowers can lower or delay monthly mortgage payments. Many federal & state-chartered banks and credit unions also agreed to the mortgage forbearance period. Borrowers should reach out to your mortgage lender directly however to confirm that they agreed to the temporary forbearance grace period because it will vary from company to company.
Unless the board of the condo or homeowner’s association has decided to allow for a forbearance of association dues, monthly association dues are still required to be paid on time. Also, make sure you understand what a forbearance is and what it isn’t–it is not debt forgiveness, it is just a shift in payments. So, for example, a 90 day mortgage forbearance shifts your payments 3 months and adds 3 mortgage payments to the end of your loan. Thanks for your question, Alice.
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