What You Need To Know About Paying Your Rent or Mortgage

As renters and homeowners grapple with mass layoffs and business closures, housing advocates are growing increasingly concerned the country will soon face a housing crisis to rival the one that nearly took down the economy a decade ago. Here’s what you need to know about paying your rent or mortgage. Federal officials have imposed a nationwide halt to foreclosures and evictions for more than 30 million Americans with home mortgages backed by the Federal Housing Administration or two government-controlled companies, Fannie Mae and Freddie Mac.

Renters face an even more precarious position. Some states and cities are offering temporary protection from evictions, but it is not universal. Here is what you need to know about who is eligible for rent or mortgage relief.

I’m a renter. Can I be evicted? The $2 trillion economic rescue legislation passed by Congress last week prohibits rental evictions for 120 days on properties secured with a government-backed mortgage. That covers about half the market for multifamily properties, according to the National Multifamily Housing Council. Many states and cities have also halted evictions. The Los Angeles City Council has approved an emergency plan to temporarily halt evictions and create a citywide rental assistance fund.

Has my city or state passed a ban on evictions of renters? You can contact your city government to ask about local moratoriums or check your state government website for information about statewide laws. The National Consumer Law Center is also keeping an updated list of places that have passed bans on evictions. The center also has advice for all renters and homeowners who are having trouble paying mortgage and rent.

Here’s a blog that is also compiling information about such moratoriums and other advice for renters who are not covered by them.

Is there a federal program to help renters? There has been a call for a national rental assistance program, but it has yet to emerge. Rep. Maxine Waters (D-Calif.), chairwoman of the Financial Services Committee, has proposed spending $100 billion to cover peoples’ rent and utilities. Democratic New York state Sen. Mike Gianaris of Queens has introduced legislation that would forgive three months of rent and mortgage payments for people and small businesses affected by the coronavirus.

Renters who lost their job or are sick because of the virus should immediately contact their landlord and alert them — in writing — of their hardships, said David Dworkin, president of the National Housing Conference. Most landlords will be sympathetic and willing to offer help, Dworkin said. “That communication is incredibly important,” he said.

What if I am a homeowner facing foreclosure or eviction? The U.S. Department of Housing and Urban Development and the Federal Housing Finance Agency, the regulator for Fannie Mae and Freddie Mac, have directed mortgage servicers to halt all new foreclosure actions and suspend those already in progress. The moratoriums will last until mid-May but could be extended, according to regulators.

How do I figure out if my loan is backed by Fannie Mae or Freddie Mac? Homeowners can look up whether their loans are backed by the mortgage companies through Fannie Mae and Freddie Mac’s websites. Fannie Mae’s online form can be found here, and Freddie Mac can be found here.

What if I do not have an FHA loan or one backed by Fannie Mae and Freddie Mac? About 5 million homeowners with loans valued at $3.7 trillion are not covered by the HUD or FHFA moratoriums, according to Inside Mortgage Finance, an industry research group. Some states, including California and New York, have paused foreclosure and eviction that would also apply to those borrowers. But without a blanket moratorium, these homeowners must negotiate arrangements with their mortgage servicer one by one.

[HUD orders 60-day foreclosure moratorium for homeowners affected by coronavirus]

“The government is essentially offering a year-long payment holiday so those who lose their jobs from COVID-19 can stay in their homes without worrying about mortgage payments or foreclosure,” Jaret Seiberg, financial services analyst at Cowen Washington Research Group, said in a research note.

California Gov. Gavin Newsom (D) recently announced that the nation’s largest banks, including JPMorgan Chase and Wells Fargo, had agreed to temporarily suspend residential mortgage payments for people affected by the coronavirus in the state for 90 days. But one bank, Bank of America, declined to sign on, saying it would offer mortgage relief on a case-by-base, month-by-month basis instead.

Mortgage servicers are expected to allow millions of borrowers affected by the crisis to skip some mortgage payments. But the money will have to be paid back. Think of it as a loan rather than a gift.

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Source: Washington Post April 1, 2020