It’s a confusing time, but lenders are putting remedies, like forbearance, in place to help homeowners.
Mortgage lenders, and the federal agencies that regulate lenders,
are putting coronavirus mortgage relief measures in place to ensure
homeowners have options if they’re unable to make payments.
Your first stop in the face of financial hardship is your lender or bank.
Just keep in mind lenders are working to figure out and implement the
new mortgage relief polices outlined by the regulatory agencies. So you
might read one thing from the FHFA, a federal regulator, but your bank
might be doing something else.
In addition, due to the number of homeowners affected by the
pandemic, lenders are dealing with a crush of calls and online queries.
Be patient, persistent, and prepared to spend time on hold.
Here are the resources you need now.
Your Mortgage
Federally Backed Mortgages
If you have a mortgage backed by Federal Housing Administration (FHA), Veteran’s Administration (VA), United States Department of Agriculture (USDA), Fannie Mae, or Freddie Mac, your loan servicer must offer you deferred or reduced mortgage payment options – called forbearance
— for up to six months. This means you don’t have to pay your mortgage
and you won’t be charged late fees, penalties, or interest while you
can’t pay.
Loan servicers for FHA, Freddie, and Fannie must provide an additional six months of forbearance if you request it.
Not sure who backs your own loan? Fannie Mae and Freddie Mac have loan look-up sites where you can find out who owns it, and how to get in touch with them.
In addition, here are direct links to some lenders and banks’ Covid-19 resources:
- Ally
- BNC National Bank
- Bank of America
- Better.com
- Caliber Home Loans
- Capital One
- Chase
- Citibank
- Navy Federal
- PHH
- PNC
- Quicken Loans
- Truist (formerly BB&T and Suntrust)
- U.S. Bank
- Wells Fargo
Mortgages Not Federally Backed
If your mortgage
is one of the 5 million in the United States not backed by a federal
entity, the Coronavirus Aid, Relief, and Economic Security (CARES) Act,
which includes a coronavirus mortgage relief mandate, doesn’t apply. But
regulators have encouraged those lenders to work with borrowers who
can’t pay their mortgages, and most banks and other lenders are
suspending mortgage payments or offering forbearance.
The level of relief you get will depend on who owns your loan. Contact your lender to find out what’s available.
Regardless
of the type of loan you have, you must apply for coronavirus mortgage
relief through their mortgage servicer. That’s the entity that collects
your monthly payments and decides how long the assistance will last.
When you reach your mortgage servicer, you’ll need to explain your
situation and provide information about your income, expenses, and
assets.
TIP: If you’re an at-risk homeowner, this downloadable PDF will help you understand the sources you can approach for help.
Foreclosure and Evictions
Federal officials have imposed a nationwide halt to foreclosures and
evictions for more than 36 million Americans with home mortgages backed
by the FHA, Fannie Mae, and Freddie Mac.
The moratorium only affects borrowers with mortgages backed by Fannie
Mae, Freddie Mac, FHA, VA, and RHS (Rural Housing Service loans through
the USDA). This doesn’t apply to the roughly 35% of mortgages held in
bank portfolios and private label securities. But some individual
lenders are offering relief.
Some cities, counties, and states, including Delaware, Indiana,
Kansas, Louisiana, New Hampshire, North Carolina and Texas, have placed
a moratorium on foreclosures. Check with your city, county, and state
governments. Find state-by-state tallies online.
Housing Counselors
Another tool in your relief toolbox are housing counselors.
Counselors can provide independent advice on buying a home, renting,
defaults, foreclosures, and credit issues. The U.S. Department of
Housing and Urban Development’s look-up tool lets you can find counselors in your state.
Your Credit
The CARES Act forbids lenders from dinging your credit score for
missed payments on federally backed mortgages and student loans during
your forbearance period. The federal government is also encouraging
private lenders to suspend reporting late payments on eligible
mortgages. The Consumer Financial Protection Bureau has more advice
about protecting your credit.
To keep close tabs on your credit, you can now obtain a free credit
report from each of the three credit bureaus, Experian, Equifax, and
TransUnion, every week for the next year through April 20, 2020. The
companies ratcheted up their once-a-year allowance to help consumers
“protect their financial health during the sudden and unprecedented
hardship caused by COVID-19.”
Get all three reports in one spot: annualcreditreport.com.
Your Student Loan
The CARES Act includes immediate relief for those who can’t make
their monthly payments on federally held loans due to coronavirus. All
loan payments (both principal and interest) are suspended through Sept.
30, 2020, with no penalty. You don’t need to apply for this program or
contact your lender. It’s automatic.
If you keep making payments,
they’ll be applied entirely toward the principal. These suspended
payments will count towards any student loan forgiveness already in
effect.
Here’s a list of servicers — and their phone numbers — for loans backed by the U.S. Department of Education.
Some
loans under the Federal Family Education Loan (FFEL) program and some
Perkins Loans not owned by the Department of Education aren’t eligible
for suspended payments. Nor are private student loans owned by banks,
credit unions, schools, or other private entities. If you can’t make
payments, contact your loan servicer to find out what options are
available. Many are offering ways, like forbearance, to postpone
payments.
Not sure who your servicer is? Look on your most recent statement and contact the servicer immediately.
If your student loan is already in default, the relief act
immediately suspends wage garnishments or tax refund deductions. They’ll
resume after the suspension ends.
Find out more about student loan relief at the Consumer Financial Protection Bureau.
Your Taxes
The IRS has pushed back the deadline for filing and payment of federal taxes to July 15, 2020. Many states are following suit. Check with your state tax agency, or see this list from the American Institute of CPAs for details on deadlines.
Related: Tips to Get Filing Ready for (Delayed) Tax Deadline
Your Real Estate Transaction
If you’re going to be buying or selling a home in the near future, find out if your county recording office can complete the deal online.
In addition, more than half of states, many under emergency state directive, allow for remote online notarization
of documents. This makes it safe and easy to complete real estate
transactions under social distancing orders. The number of states
allowing remote notarization could grow as pandemic legislation expands.
Your Appraisal
Fannie Mae and Freddie Mac have provided detailed appraisal
alternative guidelines, so homeowners and appraisers can practice social
distancing on Freddie and Fannie loans through May 17, 2020.
FHA, VA, and RHS are also allowing variations on the usual appraisal protocol. Check with your servicer for details.
Look Out For Scams
Fear breeds scams. And scammers are out in full force during the
pandemic. Beware of third parties offering mortgage assistance and other
help. Seek help from your lender directly.
For information on circulating scams, and guidance on identifying them, visit the Federal Trade Commission website.
With additional reporting by Christina Hoffmann