Homeowner Resources for COVID-19 Mortgage Relief
The Fair Housing Council of Riverside County is here to help families and individuals apply for and understand their options for mortgage relief. If you have questions about any of the processes in this document or if you need free assistance working with your lender, please call 800-655-1812 to work with one of our counselors.
It is important that you call your mortgage company as soon as possible if you have lost wages or your job due to COVID-19 and are unable to make your monthly payment. It can be overwhelming to understand regulations, different mortgage types, and the options that are offered by each company, so we have compiled a guide using communications from the federal government, the State of California, and major lenders to help you navigate the process.
Who Owns My Mortgage?
This is important to know as you learn what options are available to you. Sometimes, the organization that is listed on your monthly statement is your servicer but not the owner of your loan. If your loan is owned by Fannie Mae or Freddie Mac, they are subject to recent provisions in the CARES Act. This applies to FHA, USDA and VA loans, too. The best way to find out is to ask your servicer by calling the number listed on your monthly statement, but these online tools may be helpful:
What Mortgage Relief Options are Available?
This is the option that many banks are currently offering, and though the length of time varies, it offers a temporary hold on mortgage payments during the crisis. This option generally requires that any skipped payments are caught up at the end of the forbearance period in full. Some lenders will offer a payment plan to catch up over time at the end of the forbearance period, and some also offer an opportunity to apply for a loan modification to move the skipped payments to the end of your loan term rather than repay at the end of the forbearance. Late fees and negative credit reports are suspended during a forbearance period, though interest continues to accrue on your loan.
Payment deferral or loan modification
Some banks are offering payment deferral or loan modification, which are like forbearance but move skipped payments to the end of your loan term. With these options, you don’t have to come up with the missed payment amounts when the deferral period is over, you simply resume your regular monthly payment.
What has the Federal Government Passed in Relation to Mortgage Relief?
If you have a home loan owned or insured by a federal agency (Fannie Mae, Freddie Mac, FHA, VA or USDA), your lender is required to provide you a minimum of six months’ forbearance. Here is the essential information you need to make this request:
- You must call your lender to request the forbearance unless they notify you of an online process available to complete the request.
- The initial forbearance period is up to 60 days, and you can request up to four extensions of 30 days each.
- During the forbearance period, no fees or interest beyond the amounts scheduled can accrue beyond the normal interest that would have accrued if you were making on-time payments.
- Other than your request for a forbearance and attestation to a financial hardship caused by COVID-19 (this is as simple as a letter that you write, sign and submit stating that you are suffering from a loss of income as a result of COVID-19), a servicer may not require additional documentation to grant a forbearance.
- If you are already behind on your mortgage payments, the past due amount will also be included in the forbearance and due at the end of the forbearance period.
- During the forbearance period, your servicer must make disbursements in a timely manner from any escrow account for insurance, taxes, etc., as they would if you were making on-time payments.
- You will be required to repay all payments missed during forbearance. Before the end of the forbearance period, your servicer is required to evaluate your ability to resume your normal payment and repay the balance due; they are required to provide you with a repayment plan that is at least as long as the forbearance, but could extend longer. You may also apply for a loan modification that essentially moves the unpaid payments to the end of your loan period, but this will be subject to lender approval.
- FHA mortgage servicers are required to offer forbearance to any borrower that requests it due to COVID-19 related financial losses, and HUD has created a special “National Emergency Partial Claim” that will give borrowers the option of placing unpaid balances at the end of the forbearance in an interest-free subordinate mortgage that they do not have to pay off until their first mortgage is paid off.
Servicers of federally backed mortgages may not initiate any judicial or non-judicial foreclosure process, move for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction or foreclosure sale for not less than the 60-day period beginning on March 18, 2020.
If you have questions about your specific loan, please call your loan servicer. If you need help navigating these processes, Fair Housing Council of Riverside County counselors are here to provide guidance and resources at 800-655-1812 or email@example.com.
What has the State of California Ordered in Relation to Mortgage Relief?
Governor Newsom worked with over 200 banks, credit unions and mortgage servicers to create an agreement to provide mortgage relief during the COVID-19 crisis. The terms vary based on the type of loan, for example, they don’t apply to federally serviced loans since there are already terms in place for those, and lenders aren’t required to follow these but many are doing so in good faith. Here is a list of the financial institutions that have agreed to the terms: dbo.ca.gov/covid19-updates-fi/.
- The financial institutions will offer forbearance for up to 90 days, longer if the COVID-19 crisis continues after that time.
- The institutions have agreed to set up streamlined processes to make the process to request forbearance easier. You must call your lender to begin the forbearance application process unless your mortgage servicer notifies you otherwise.
- The institutions will waive late fees and will not report missed payments during the forbearance period to credit agencies
- The organizations will not start foreclosure processes for 60 days starting March 25, 2020.
What Information Do We Have Regarding Specific Bank Policies?
(Source: Forbes, March 31, 2020)
- Ally Bank: Evictions and foreclosure proceedings are suspended until July 30.
- Associated Bank: Foreclosure actions on residential properties are suspended for 60 days, unless required by federal or government agencies.
- Bank of America: Evictions and foreclosures are suspended for at least 90 days.
- Citizens Bank: Home foreclosures have been automatically suspended for up to 60 days.
- Fifth Third Bank: All foreclosure activity is suspended for the next 60 days.
- First National Bank: New foreclosures are suspended for customers directly impacted by COVID-19.
- First National Bank of Omaha: Foreclosure-related activities have been temporarily paused.
- Flagstar Bank: All foreclosure, eviction and repossession activity is suspended through the end May 2020.
- Huntington National Bank: Foreclosure-related activity specific to residential properties are suspended through the end of May 2020.
- KeyBank: Residential property foreclosures have been paused, unless required by a federal or government agency.
- Regions Bank: New efforts to start property foreclosures on consumer real estate loans are suspended for 30 days.
- Santander Bank: Foreclosures on mortgages and home equity lines of credit are suspended.
- TCF Bank: All new residential property foreclosure actions have been suspended through the end of April 2020.
- Webster Bank: Foreclosure on residential loans has been put on a 90-day moratorium.
- Wells Fargo: Residential property foreclosures sales and evictions have been suspended.
Mortgage Relief Policies
The financial institutions partnering with the State of California are listed in a database on their website here: dbo.ca.gov/covid19-updates-fi/. A link is included for each institution’s COVID-19 resources along with a contact number. If your institution is not listed or you have specific questions about your mortgage, please call your servicer directly. If you need free assistance working with your lender, please call 800-655-1812 to work with one of our counselors.
What if I have a Conventional Loan and my Financial Institution is not on the List of Organizations that Agreed to Governor Newsom’s Terms?
If your mortgage is not covered under the federal relief program or the California Governor’s agreement and you are experiencing hardship due to COVID-19, your best option is to call your servicer directly to explain your situation and find out if they are offering assistance.
What do I do to Request Help if I Can’t Pay My Mortgage Due to the COVID-19 Crisis?
(Source: Consumer Financial Protection Bureau, March 31, 2020)
Call your servicer
You may have to wait on the line for a while to speak to your mortgage servicer because there are a lot of people in need right now. Be prepared with the following information and questions you want to ask, and check their website before you call to see if there is a list provided of information you may need. Have your account number handy.
You may need to explain
- Why you’re unable to make your payment
- Whether the problem is temporary or permanent
- Details about your income, expenses and other assets, like cash in the bank
- Whether you’re a servicemember with permanent change of station (PCS) orders
Questions to ask
- What options are available to help you temporarily reduce or suspend my payments?
- Are there forbearance, loan modification, or other options?
- Can you waive late fees?
Get it in writing
Once you’re able to secure forbearance or another mortgage relief option, ask your servicer to provide written documentation that confirms the details of your agreement and that you’re clear on what the terms are. With some forbearance programs, you may owe all of your missed payments at one time, or additional payments at the end of the mortgage might be required, so make sure you’re familiar with the final terms.