The last few weeks haven’t been easy for any of us. From the team here at Altrua, we sincerely hope everyone and their families are keeping safe and healthy during this unique time in modern history – especially those out working on the front lines: The nurses and medical community, grocery store workers, couriers and everyone else out there stepping up, to keep society operational during this time.

There are many Altrua clients reading this, who are working directly with the public – so a special thank you for what you are doing.

But for many of us, as thankful as we can be – are facing layoffs, or may have already been laid off by their employer. So I wanted to take a few minutes here to discuss the mortgage deferral option that is available.

You’ve probably already heard that such a payment deferral exists, so the point of this article is to provide a bit more detail and perspective about it.

Specifically, we will look at:

• Who to contact to make a deferral payment.
• How to have a mortgage payment deferral conversation with your lender.
• What to potentially expect moving forward if you decide to defer your payment.

But whatever route you decide on – do not just skip a payment without proactively discussing with your lender. Missing a payment will impact your credit and can cause complications down the road. So be sure to invest some time with your lender if you are facing payment trouble.

Who to Contact to Defer Your Payment

Deferring your mortgage is a good idea if you have been laid off, or even if you think that you will be laid off your job soon. About three weeks ago, the Federal Government of Canada strongly ‘encouraged’ Banks and mortgage lenders to allow for a payment deferral (deferral – not to be confused with a payment forgiveness) of up to 6 months. If you have not already found your lenders contact number, please see the list here: https://altrua.ca/covid-19-updates/

Also noting:

• There is currently a backlog of about 15,000 – 30,000 unanswered payment deferral calls and emails at Banks and lenders across Canada.
• It can take up to a full business day on hold to get through to a lender. Try calling earlier in the day than later.
• There have been reports of phone systems crashing and temporary busy signals at key lender call centers.
• If you remain patient, understanding and stick with it, you will eventually get through.

Its better to be mentally prepared for such a call going in, rather than to sit there for hours in pure frustration, wondering if you will ever be connected. You will. Lenders have committed to addressing each caller no matter what. So plug your phone into the charger, put it on speaker, and try and get some work or relaxation in while you wait.

How to Have a Mortgage Payment Deferral Conversation with Your Lender

Once you get a hold of your lender, as frustrated and as drained as you may be from the wait – remember it’s another human being on the other line – potentially working 9-10 hour days and talking to dozens of people a day in a similar situation to you. So, a little patience and understanding with them will go a long way. Once on the call, the lender representative will likely ask:

Why are you requesting the deferral?

Has there been a lay off? Are you facing an impending layoff?

Have your hours or income been reduced in any way or form?

In many cases we’ve been hearing that lenders can give a couple months off payments on your good word alone. However, it is a case by case basis to approve deferrals – especially of a longer term (ie. 3-6 months) and the rep may ask for a document such as a recent paystub coming in lower, letter of temporary layoff, or record of employment ultimately showing that your income has been reduced or that you have been laid off in these cases.

In other words, have ready some information on how COVID has impacted your ability to make payments.  The representative that you are talking to has been given instructions by their managers about who and how to approve payment deferrals, so let’s help to make their job easier. They will need some sort of justification for their notes/ records.
Again, if the lender representative finds it to be a pleasant and sincere conversation, this will likely help you further.
In a worst-case scenario – if you do not have success talking to the representative, consider re-positioning your case and – that’s right – try calling back to speak with a different representative. Lenders are so busy now; it is often the reality that the left hand does not know what the right hand is saying, and that you will have different luck with a different representative at the same lender.

Or feel free to connect with me and the team here at Altrua – we can help position your case for payment deferral. We are always happy to help.

You’ve Deferred Your Payment – What Happens Next?

If you have an email or other document from the lender verifying when and for how long your payment will be deferred – you should expect this to proceed without a hitch. But with this said, there will be a small percentage of people who will still see an additional payment withdrawn from their account – after – the date that the lender agreed to make the deferral for. This can happen with any of the Big Banks, wholesale/ discount lenders, or Credit unions and it is a mistake with their systems, of which are not normally set up for mass payment deferrals.

If an additional payment comes out – don’t panic. Its not unique to you and there have been reports of many system issues over the past few weeks. These issues can be resolved on a case by case basis – but importantly – if this does happen to you, remember to keep your patience and understanding when you reach back out to the lender to resolve.

The lender does have the ability to refund the payment. But, as most if not all of our readers will understand, this mistake is not the fault of the representative on the phone. Keep the conversation friendly and your issue will be resolved.

For those who do not face any issues after the payment has been deferred, it’s a matter of keeping in touch with the lender regarding when you will be able to resume payments.

If your layoff is extended and you need more time, its better to contact the lender sooner than later to work on this. The government is currently working with lenders to defer payments for up to 6 months.

If you return to work, and your payments are still deferred, just remember that these deferred payments are all added back into your overall mortgage balance, and interest will be charged on the deferral (that means paying interest on deferred interest payments :S ). So in order to reduce future interest burden it is probably financially prudent to resume payments as soon as you are comfortable or able to do so.
If your payment stops as expected, without issue, then you should be prepared for when it is agreed to begin again. It will be 10 times harder to resolve credit disputes after the case than to get the payment deferral agreement in writing proactively.

Again, if you need any help or if there is any more specific question that you’d like answered – that’s what I am here for. Just let me now how I can help best.

On behalf of the team here at Altrua – we are thankful for your partnership in business and are here for you when you need us most.

Brent Richardson
Principal Mortgage Broker
Altrua Financial Inc.