COVID-19 Pandemic Relief for Renters and Homeowners

With “Safe at Home” orders across the country and businesses closing, Americans who have lost wages or business income due to the pandemic are finding it hard to pay for their housing.

What should you do if you can’t currently pay -- or anticipate becoming unable to pay -- your rent or mortgage?

• Homeowners with a conventional loan: Check your email and contact your mortgage lender. Many of the large mortgage companies (including JPMorgan Chase and Wells Fargo), have agreed to temporarily suspend residential mortgage payments for people affected by the coronavirus for 90 days with no fees or penalties and no reporting to credit bureaus. Other banks like Bank of America are taking requests on a case-by-case basis. Read the terms carefully to be sure you understand the grace period and any additional fees.
  • Keep in mind that while Pinnacle does originate mortgages, nearly all of them are serviced by other banks. So even if you got your mortgage through Pinnacle, you should contact the same bank you send your monthly payments to if you have questions about relief.
• Homeowners with a Federal Housing Administration (FHA) mortgage loan: The U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Finance Agency (FHFA) have ordered loan servicers to halt all new foreclosures on FHA loans and suspend foreclosures in process for 120 days following the signing of the CARES Act on March 27, 2020. The moratoriums will last until mid-May but could be extended, according to regulators.
• Homeowners with loans backed by Fannie Mae and Freddie Mac: The banks that service these mortgages have been ordered to offer generous forbearance programs allowing borrowers affected by the coronavirus to skip their mortgage payments for up to a year, though the actual amount of time will be decided by the bank. Borrowers must apply for the mortgage relief through the bank servicing their mortgage.
• If you have trouble reaching your loan servicer: Don’t panic. While mortgage payments are typically due the first of the month, borrowers are not likely to be considered late until the 15^th. A forbearance program can be approved within a few days, and most do not require borrowers to submit a lot of paperwork.
• Borrowers will still need to pay the rest of the mortgage. Depending on what your bank decides, some borrowers will be told to repay the entire past due amount all at once. Others will be given several months to catch up. Regulators are encouraging banks to extend the length of the borrower’s mortgage rather than forcing them to catch up all at once.
• Renters: contact your landlord and alert them — in writing — of your hardships. Communication is key, and you may be surprised at their willingness to help you. It’s easier than finding a new tenant, after all. There has been a call for a national rental assistance program, but it has yet to emerge.
• Find out if the property you’re renting is secured with a mortgage backed by Fannie Mae or Freddie Mac, as federal officials have placed a moratorium on evictions of renters in these properties for 120 days as well.
• Renters in certain states and cities may benefit from local legislation on evictions. You’ll still have to pay the total bill once the bans are lifted, and may incur additional fees, but you can avoid eviction for late payments. The National Consumer Law Center is keeping an updated list of places that have passed bans on evictions.

Whatever your situation, remember that communication is your best tool. Write down dates and names of people you speak with, and get any offers in writing. Don’t hesitate to call your Pinnacle financial advisor to help you determine if what’s offered is in your best interest.