April 5th, 2020 12:46 PM by Jackie A. Graves
The U.S. battle with the coronavirus has left some Americans
struggling to pay their bills, including mortgage payments. As state and local
governments continue to order business closures, lockdowns and curfews,
out-of-work homeowners are wondering how they’ll afford housing costs.
Some workers are more vulnerable than others, including roughly
15 million Americans who work in hospitality and leisure, a sector that has
been virtually shut down as the coronavirus continues to spread.
Across the country, moratoriums are in place to stop evictions
in an effort to lessen the financial burden created by COVID-19. On Monday, the
governor of California, Gavin Newsom, authorized local governments to stop any
foreclosures through Sunday, March 31, for both homeowners and renters.
“People shouldn’t lose or be forced out of their home because of
the spread of COVID-19,” said Newsom, in a statement. “Over the next few weeks,
everyone will have to make sacrifices – but a place to live shouldn’t be one of
them. I strongly encourage cities and counties to take up this authority to
Fortunately, lenders are proactively offering to help borrowers
in trouble by providing hardship forbearance options. Additionally, cities and
states have taken measures to halt evictions and foreclosures. President Trump
added to the relief efforts by directing the Department of Housing and Urban
Development (HUD) to suspend all foreclosure and eviction activity until
further notice; however, details are not known yet.
During this stressful time, keep in mind mortgage servicers
would rather work with existing customers (even if they can’t currently make
payments) than start collection or foreclosure proceedings. Here are steps you
should take if you can’t afford your home loan payments.
It’s important to get in touch with your lender immediately if
you expect to be late or unable to make your monthly mortgage payment. The
worst thing you can do, says Bill Halldin, a spokesperson for Bank of America,
is to not communicate with your lender.
“We (at Bank of America) want to work with our customers
affected by the coronavirus, so please get in touch with us,” Halldin adds.
There are programs in place for folks who are experiencing
hardship. When asked what assistance is available for their customers, here’s
what a few lenders said:
Ally Bank said they will defer Ally Home payments for up to 120
days for homeowners who are facing financial hardship due to an interruption in
income. “During this time, interest will accrue, but you won’t be charged any
late fees or have impacts to your credit,” Ally Bank said in a statement. If
you need to start this process, call 1-866-401-4742.
Bank of America
“If a person has a hardship related to the coronavirus and is
unable to pay us or has an issue with their account, we encourage them to call
our client services team,” Halldin says. “Home Loans Special Payment
Forbearance and auto loan extensions are available to clients to assist with
suspending payments during this difficult time.”
“At Quicken Loans, our number one priority continues to be our
clients and making the online mortgage process as clear and safe as possible to
help provide some certainty in these uncertain times,” says John Perich,
director of public relations at Quicken Loans. “We are following the processes
outlined by Fannie Mae, Freddie Mac and Ginnie Mae to provide forbearance
relief to those affected by COVID-19, and urge policymakers at the federal,
state and local levels to act now to present options that allow mortgage
servicers to help homeowners whose cash flow may be impaired by this
“At TD Bank, the health and well-being of our colleagues and
customers is our primary concern. We recognize that people in communities that
we serve may experience financial hardship due to Coronavirus, so we are
offering assistance to our impacted customers. Our financial relief options for
impacted TD customers are available upon request. These
assistance options may include, for example, fee waivers, early access to
Certificates of Deposit and payment extensions, depending on the customer’s
request,” a TD Bank spokesperson said, in a statement.
If impacted customers have concerns about meeting their mortgage
or home equity loan payments, they may contact 1-800-742-2651 for
“Wells Fargo is committed to helping customers experiencing
hardships, including from the Coronavirus Disease (COVID-19),” says Beth
Richek, vice president of corporate communications at Wells Fargo. “For
customers in need of assistance, we have specialists available to discuss
options for their consumer lending, small business and deposit products.”
It’s important to note that mortgage forbearance is not mortgage
forgiveness, meaning you still have to pay back what you owe.
“Be aware, however, that you will need to repay the amount that
was reduced or suspended, either as a lump sum or by adding to your normal
monthly payment,” says Leslie Tayne, founder and attorney at Tayne Law Group.
A mortgage forbearance is an
agreement between you and your mortgage servicer that lets you either stop
making payments or lower your payments to an affordable level on a temporary
basis during your hardship. This can be helpful during times like these when
your job isn’t terminated, just suspended indefinitely.
For people who will lose wages during the time they’re not
working, it’s important to communicate that information to your lender. You
should also make a plan for how you will repay the suspended amount when your
forbearance ends. Making a budget now could save you stress later, so when the
time comes to repay you’ll be ready.
Workers whose jobs were halted because of COVID-19 are likely to
be eligible for unemployment benefits. Many states have measures in place to
help people who are not being compensated while their job is suspended. Check
your state’s employment department to see what options are available to you.
Finally, be sure to verify the legitimacy of anyone you talk to
before sharing personal information or identification. During times of crisis,
scammers run rampant and prey on people looking for assistance.
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