As the coronavirus pandemic continues to shut down U.S. cities and forces individuals into semi-isolation, some people are already out of work for the foreseeable future and others are likely to become so. How will those suddenly without income be able to keep a roof over their heads?
The federal government and states are starting to step in to provide protection for homeowners and renters. These initiatives are in their early stages and as COVID-19’s economic impact spreads, these relief programs will likely spread too.
This list will be updated regularly as new programs and initiatives come on line.
Assessing the Borrower’s Situation
As the Consumer Financial Protection Bureau (CFPB) advises, the first step for an affected mortgage borrower is to determine their individual situation:
- If a borrower can pay their mortgage, then they should make the payment. If there’s not an immediate problem with paying the mortgage, it’s better for the borrower to start with the mortgage servicer’s website to see what COVID-19-specific information is available than it is to call, as the servicer is busy working with those who can’t pay this month.
- If a borrower can’t pay their mortgage, or can only make a partial payment, then they should contact their mortgage servicer immediately, and be prepared for longer call wait times than normal.
Federal Relief Programs
Federally Backed Mortgages
Under the provisions of the CARES Act, individuals with federally backed mortgage loans who are experiencing financial hardship due to COVID-19 can request a forbearance period by contacting their mortgage servicer. Federally backed mortgages include FHA, VA, USDA, Fannie Mae and Freddie Mac.
The CARES Act provides for affected borrowers to defer their mortgage payments for up to 180 days. Borrowers also have the right to apply for an extension of another 180 days of forbearance. There will be no penalties or fees added to the account, although regular interest will still accrue.
Borrowers must contact their mortgage loan servicers to initiate this forbearance.
The Department of Housing and Urban Development (HUD) was ordered by President Trump on March 18 to suspend evictions and foreclosures for the next 60 days. The moratorium applies to single-family homeowners with mortgages insured by the Federal Housing Administration (FHA), a part of HUD that insures home loans made by FHA-approved lenders.
The order not only prevents new foreclosure actions but also suspends all foreclosure actions currently in process.
Fannie Mae and Freddie Mac
According to the CFPB, nearly half of all U.S. home mortgages are owned or backed by Fannie Mae or Freddie Mac.
The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae, Freddie Mac, and the Federal Home Loan banks, is providing payment forbearance to borrowers impacted by the coronavirus for up to 12 months due to hardship. Penalties and late fees also are being waived. No delinquency related to forbearance will be reported to credit bureaus. Additional information is available from Freddie Mac’s coronavirus help page and from Fannie Mae’s coronavirus help page.
Additionally, Freddie Mac has implemented a program offering relief to multifamily landlords whose mortgages are financed with a Freddie Mac multifamily fully performing loan. Under this program, landlords can defer loan payments for 90 days by showing hardship due to COVID-19; in return, landlords are required not to evict any tenant based on nonpayment of rent during the forbearance period.
Renters, Including in Public Housing
The CARES Act protects those living in various forms of public housing by providing a temporary moratorium on evictions, as well as late fees, for nonpayment of rent for 120 days beginning March 27, 2020. Landlords are not allowed to issue a notice to vacate until after the temporary moratorium period and will not be allowed to require a tenant to vacate until 30 days after the giving of the notice.
This moratorium also applies to renters in single or multifamily properties whose landlords have federally backed loans, including FHA, VA, USDA, Fannie Mae and Freddie Mac.
State Mortgage Relief Programs
Some states are beginning to implement relief measures for homeowners affected by the COVID-19 pandemic. While some individual states are halting evictions and foreclosures, mortgage and rent payments might still need to be made. Many state officials say these measures are in flux and will change over time.
(State-specific information is being added as new programs are announced. Bookmark this post for future reference.)
California
California Governor Gavin Newsom issued an executive order halting all evictions during the pandemic. The order is in effect through May 31, with the option of being extended, and halts evictions for both renters and homeowners. The order does not relieve a tenant from paying rent, and a landlord still has the ability to recover rent that is due. However, individuals cannot be evicted from their home for nonpayment.
The order also requests that financial institutions halt foreclosure activity and protects against utility shutoffs for individuals affected by COVID-19.
Delaware
The Delaware Justice of the Peace Court has postponed all landlord and tenant proceedings until after May 1. This includes any eviction proceedings.
Indiana
Indiana Governor Eric Holcomb has announced that no residential eviction proceedings or foreclosure actions can be initiated during the state of emergency—however, individuals still need to pay their rent or mortgage. Indiana’s current state of emergency ends on April 5 but will be extended an additional 30 days.
Additionally, essential utility companies (gas, electric, broadband, telecom, water and wastewater services) are prohibited from discontinuing service during the public health emergency.
Kansas
Kansas has temporarily prohibited evictions and foreclosures across the state. There will be no mortgage foreclosure efforts or judicial proceedings, and now residential eviction efforts, until May 1, 2020.
Kentucky
The Kentucky Supreme Court has canceled all eviction proceedings until April 10. This cancellation does not apply to cases already sent to the sheriff’s office to be executed.
Maryland
Maryland Governor Larry Hogan has banned eviction completely for the duration of the state of emergency. Hogan also is preventing utility companies from shutting off service due to lack of payment or from charging late fees. The utility protections include electric, gas, water, sewage, phone, cable TV and internet services.
New Jersey
New Jersey Governor Phil Murphy has created an initiative to offer 90 days of mortgage forbearance to borrowers economically impacted by COVID-19. Institutions included in the initiative include JPMorgan Chase JPM, U.S. Bank, Wells Fargo WFC, Bank of America BAC and over 40 other federal and state-chartered banks, as well as credit unions. During the forbearance period, financial institutions won’t report negative information to credit reporting agencies.
New York
New York Governor Andrew Cuomo announced on March 19 that mortgage payments will be suspended for 90 days based on financial hardship for borrowers due to the effects of the coronavirus. Cuomo is also temporarily postponing or suspending foreclosures. While aid to renters is still being debated, there is a 90-day moratorium on evictions, both residential and commercial.
North Carolina
On March 16, North Carolina announced it is stopping eviction and foreclosure hearings for the next 30 days. Eviction orders already in the system will be carried out unless courts step in; one sheriff is already requesting courts to stop eviction orders already handed down by judges, according to the Charlotte Observer.
Private Mortgage Relief Programs
The mortgage loan forbearance provided under the CARES Act is specific to federally backed mortgage loans (FHA, VA, USDA, Fannie Mae and Freddie Mac). However, borrowers with other types of loans may have relief options. Any borrower who is looking to suspend or reduce mortgage payments should contact their mortgage servicer. It’s also important to understand how and when the missed payments are made up after any forbearance period ends.
In addition to federal- and state-specific efforts, banks are offering relief to mortgage customers affected by the coronavirus. Here are a few examples:
Ally
Ally Bank is allowing existing customers to defer mortgage payments for up to 120 days. No late fees will be charged, but interest will accrue. For payment assistance, customers are encouraged to apply via their Ally account online, in order to avoid long call wait times at 866-401-4742.
Bank of America
Bank of America mortgage customers who find themselves struggling financially due to COVID-19 can defer their payments; this applies to both mortgages and home equity loans. To defer payments, mortgage holders need to request deferment directly through the bank and the waived payments will be added to the end of their loan term.
As of now, there are no guidelines in place on how many payments can be waived or for how long. The deferments will be approved on a case-by-case basis.
Citibank
Some mortgage customers may be eligible for a hardship program through Cenlar FSB, the bank’s service provider. For assistance, call Cenlar FSB at 855-839-6253 (Mon–Fri, 8:30 a.m.–8 p.m. ET or Sat, 8:30 a.m.–5 p.m. ET).
Fifth Third Bank
Mortgage and home equity customers can apply for forbearance of up to 180 days. Customers who are granted the assistance have three options at the end of the forbearance period: Make a lump sum payment after forbearance expires, agree to a repayment plan with the hardship team or be evaluated for loan modification options to move missed payments to the back of the loan, extending the loan term. Borrowers must contact the bank directly at 866-601-6391 to discuss mortgage forbearance.
Quicken Loans
Quicken Loans is offering temporary forbearance to borrowers who might be unable to make mortgage payments due to financial hardship from the coronavirus pandemic. Borrowers who have conventional loans won’t have their credit score impacted during the forbearance; an online application is needed.
The COVID-19 pandemic is reshaping industries across the spectrum, and healthcare is being impacted most of all. As hospitals, doctors, pharmas and biotechs pivot to fight the deadly disease, venture capitalist Kirstina Burow sees the industry emerging stronger as it is forced to innovate.
“Everybody who does early-stage biotech investing is by nature an absolute optimist,” says the managing director of Chicago-based Arch Venture Partners. “The optimist in me says there will be some silver linings from this really horrific pandemic.”
Over the last 18 years that she has been investing in the sector, Burow has seen some notable exits like Beam Therapeutics, which had its initial public offering in February, and Gossamer Bio, which had its IPO in February 2019. Her passion, she says, is mental healthcare, but is focused on the potential for technology to improve wellness across the board.
Source: Forbes