You shouldn't lose your home because of the coronavirus response.
The global economy has been thrown into turmoil in recent weeks due to the outbreak of novel coronavirus, or COVID-19. The United States and many other countries are attempting to stop the spread of a worldwide pandemic by mandating that businesses close and public gatherings be suspended.
These measures have resulted in millions of Americans being left temporarily or permanently without incomes due to a job loss or reduction in hours. Unfortunately, most Americans have very little by way of emergency savings in their bank accounts. If you're one of them, the loss of a paycheck could put your housing at risk.
The good news is, there is assistance available to reduce the chances of losing your home or apartment during the coronavirus crisis. There are also resources for people who don't have safe shelter during this time when the U.S. government has recommended social distancing, or remaining in your home as much as possible.
Help for homeowners
If you have a mortgage on your home, there's a good chance it is guaranteed by Fannie Mae or Freddie Mac. After all, these two agencies insure approximately half of all mortgages in America. If your home loan is one of them, the Department of Housing and Urban Development (HUD) has put a moratorium on foreclosures for 60 days. This means, even if your home was already pending foreclosure, you cannot be removed from your house for at least the next two months.
Regardless of whether your mortgage is government-backed or not, most lenders are working with clients to suspend late payments and allow homeowners to put their accounts temporarily into forbearance if they cannot make payments during these troubled times.
In fact, according to the Housing Policy Council (a trade group that includes, but is not limited to, HSBC, PNC, Wells Fargo, JPMorgan, Quicken Loans, and Citigroup), lenders are at work on a long-range plan that would allow for the suspension of payments during this public health crisis. Some banks have also already announced plans to help customers. Examples of policies put in place as of March 19, 2020, include the following:
- Ally Bank is allowing mortgage customers to defer payments for up to 120 days.
- Bank of America will provide relief for borrowers on a case-by-case basis, which could include a suspension of payments without late fees.
- Truist is offering payment relief to customers with consumer loans, including mortgages. Truist was formed recently by a merger between BB&T Bank and SunTrust Bank. If you had your mortgage with either lender, you should give Truist a call.
If your lender is not on the list, it still may be rolling out options for relief. You should always contact your mortgage provider as soon as you become concerned about your ability to pay.
It's important to note that, even if you are allowed to pause payments and avoid late fees, interest will continue to accrue. This means your mortgage balance will grow during the time you aren't making payments on your loan, and the total cost of paying off your house will go up. So you should only take advantage of the ability to pause payments if the financial impact of coronavirus on your family means you cannot make them.
You may also wish to reconsider refinancing your current mortgage loan to reduce your payments. This could be a good time to do so because mortgage rates have fallen due to the Federal Reserve cutting interest rates.
Help for renters
A growing number of localities across the country have put a moratorium on evictions during the coronavirus crisis, so many renters don't have to worry about being removed from their homes.
If you need help paying your housing bills, you can call 211 (or find your local 211) to learn about services and support in your area. While there is no nationwide program to provide assistance with rent payments at this time, 211 (or your local version of it) can connect you with state resources or non-profits that could help.
Help for those without secure housing
If you are currently homeless or at risk of becoming homeless, the COVID-19 crisis is likely to have an outsized impact on you. That's because you can't simply shelter in place.
In addition, if your home is not a safe place due to the risk of domestic violence, it may also be difficult for you to remain in your house to comply with social distancing policies.
There are resources out there for people in these situations, including:
Individual states are also making resources available. You can check your local Department of Health and Human Services website to explore any local assistance you could qualify for.
Help is available -- you just have to ask for it
Coronavirus will affect the lives of millions of Americans -- even those who stay healthy. You should never be afraid to ask for help in response to this virus, whether you're concerned about how coronavirus could affect your finances or you need mental health assistance or substance abuse counseling.
Now more than ever, it's important to come together as a community -- even during this time of social distancing -- to make sure we all stay as strong as possible until this crisis has passed.
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March 20, 2020 at 10:22PM
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Coronavirus: Housing Assistance Resources - The Motley Fool
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