• Servicer call centers are currently overwhelmed; borrowers should try applying online through the servicer's account portal.
· • When making a request by phone or by letter, borrowers with a financial hardship due to the COVID-19 emergency should state that clearly.
· • Find out how long the forbearance will last. If borrowers' financial problems have not been resolved before the end of the forbearance, request an extension before the forbearance ends (borrowers are entitled to a total forbearance period of up to 360 days under the CARES Act).
· • Find out how the borrower will be required to make up the payments at the end. Making a lump sum payment will be impossible for most borrowers; be prepared to request other arrangements.
· • If the borrower has an escrow account, ask how escrowed items will be paid during the forbearance. The servicer should continue to pay them if the borrower has an escrow account. But otherwise, if the borrower cannot continue those payments, the borrower should contact each payee.
· • Borrowers who do not have an escrow account should continue to pay their property taxes, insurance, HOA fees, and other home-related items, if possible.
· • Borrowers who believe they have been improperly denied a forbearance or have other problems with their servicer should submit a complaint to the Consumer Financial Protection Bureau using its complaint portal.
Fannie Mae and Freddie Mac's regulator said yesterday that borrowers benefiting from programs that let them skip mortgage payments due to the coronavirus pandemic won't have to make lump-sum repayments when the crisis passes, Bloomberg News reported. The Federal Housing Finance Agency's announcement is meant to "combat ongoing misinformation" about the forbearance plans homeowners are entitled to seek under the $2 trillion economic stimulus package enacted last month, Director Mark Calabria said in a statement. "During this national health emergency, no one should be worried about losing their home," Calabria said. "While today's statement only covers Fannie Mae and Freddie Mac mortgages, I encourage all mortgage lenders to adopt a similar approach." There has been growing confusion among borrowers and lenders about how consumers would make up for the payments missed during the forbearances, which could last for as long as a year. The stimulus legislation didn't outline what happens when the forbearance period ends, prompting some lenders to tell borrowers they might have to make lump-sum payments or meet other onerous terms. The Federal Housing Administration, part of the Department of Housing and Urban Development, as well as FHFA, have since issued guidance to lenders about what terms they should be offering. Still, many companies that service mortgages have been unsure about what the repayment terms should be and in some cases, have been dissuading consumers from taking advantage of the program.
Many mortgage lenders are offering payment suspensions, one for 6 months. I have been advising clients, in bankruptcy or not, about the suspension of mortgage payments and what happens when the banks decide the crisis is over and the missed payments must be made. According to Bloomberg News, Fannie Mae and Freddie Mac's regulator said yesterday that borrowers benefiting from programs that let them skip mortgage payments due to the coronavirus pandemic won't have to make lump-sum repayments when the crisis passes. The Federal Housing Administration, part of the Department of Housing and Urban Development, as well as FHFA, have since issued guidance to lenders about what terms they should be offering. My recommendation has been to pay something if at all possible, at least the escrow portion of the loan, if that is how you pay taxes and insurance. If you do not have an escrow payment, pay the interest portion of the loan payment. If not possible, set whatever you can aside for when repayment is requested.
Stretch Your Dollars
If you cannot pay all your debts, try to reduce your monthly payments. Even if you must pay the full amount eventually, delay can help, particularly if your financial problem is caused by unusual expenses or a short-term drop in income.
Low priority debts (medical, credit card, private student loan) can wait if payment endangers higher priority debts.
Mortgage payments. You may be able to skip a few months through programs offered by most banks. If your taxes and insurance (escrow) are included in payment, pay at least that amount, followed by the interest portion and the principal portion last.
Federal student loans. Call your servicer about special programs and for income based
Utility Call the company for payment options.
Car loans. Call Lender for payment suspension options
Mortgage Payments Deferred
New York State has ordered state-regulated mortgage lenders to provide a 90-day penalty-free grace period for people facing financial difficulties due to the pandemic such as losing their job. However, not all mortgage lenders are state-regulated, including many who provide mortgages for single-family homes backed by Fannie Mae and/or Freddie Mac or the Federal Housing Administration (FHA). The federal government has announced these government-sponsored financial institutions will allow deferral of mortgage payments for up to one year for those households that can demonstrate hardship due to the coronavirus pandemic. If for whatever reason, you have not been making mortgage payments and are facing foreclosure, there is help. New York State supports the Homeowner Protection Program (HOPP) which helps homeowners avoid foreclosure by connecting them to free, qualified foreclosure relief services. If you are contacted by a foreclosure assistance firm, make sure they are members of HOPP. For more information click here: HomeownerHelpNY
Health, Life and Property Insurance Payments Deferred for Consumers and Small Businesses Experiencing Financial Hardship
Due to COVID-19, consumers and small businesses may defer paying health insurance premiums through June 1, 2020. Under terms of the Governor's Executive Order, health insurance payments may be deferred, and companies are barred from reporting the late payments to credit reporting agencies. Health insurance plans will still be required to pay claims for the individual and small group plans through June 1. New Yorkers experiencing financial hardship may also defer for 60 days the payment of premiums and fees under auto, homeowners and renters insurance. Small businesses are also covered. Payments for life insurance policies and annuities may be deferred for 90 days. For more information from the New York State Department of Financial Services go this web address: https://www.dfs.ny.gov/press_releases/pr202003301
In this difficult time, you may face some difficult choices, such as whether to pay mortgage / rent or credit cards, or medical bills. If the business slow down affects your income, prioritize what you must pay and slim down expenses where possible. Make food, medicine, and mental health your first concern. If in doubt about your readiness for a jobless stretch, set aside, for the moment, payments on credit cards, medical bills, and student loans.
Keeping your roof over your head, and your transportation should be at, or very near the top of the list.
Mortgage: If you cannot pay the full monthly payment, try to pay at least the escrow portion (Taxes and Insurance); next would be to pay the interest portion if you can. Clearly label on your payment what you are paying. IN NEW YORK, foreclosures and evictions have been put on hold. But, eventually, these payments will become due.
Medical bills can usually be near the bottom, as medical providers wait a long time to either report to credit agencies or go to legal collection. Credit card (and medical) payments are not a priority, the simple reason being you can get legal relief from this debt, but you cannot undo repossession of your car or eviction; and it can be a difficult and costly process to reverse a foreclosure proceeding.
I hope that you are well and taking the necessary precautions. If you are in the health care field,or work in a hospital,as my son is, I applaud your efforts and am thankful for your dedication.I am available for you.I am available for you to discuss your financial situation, debtsyou are having difficulty paying; and, just as important, also the protection of yourhome,car and other assets and belongings.I can proceed whenever you are ready. We can literally do everything remotely todiscuss your situation; discuss options and steps to take; and tofile your case. I love to meet with people, but we can also have a"face to face" onZoom,Skype or Whats App. Questions and concerns can be handled by email and telephone. Paperwork can also be exchanged and signed remotely. Be vigilant with your personal self.