During these unprecedented times of uncertainty, Americans need help. The Coronavirus (Covid19) continues to wreak havoc in our daily lives and for nearly 2 weeks now, pressures and worries have been mounting concerning our health and our finances.
With everything else going on, the last thing you should have to worry about is losing your home, for reasons completely out of your control. You can now rest just a little easier, knowing that help is on the way. A moratorium on mortgage foreclosures, at least in California, was announced on March 25th.
Yesterday, California Gov. Gavin Newsom announced that several major banks and other financial institutions have agreed to delay foreclosures and provide mortgage relief to California homeowners who are struggling to make their monthly payments due to the novel coronavirus outbreak. This moratorium agreement is offered by lenders like Wells Fargo, U.S. Bank, CitiBank, J.P. Morgan Chase and possibly 200 others. “The assistance comes as more than 1 million Californians have applied for unemployment benefits this month due to layoffs or reduced hours amid the pandemic,” Newsom said. The story was posted at: https://www.latimes.com/california/story/2020-03-25/coronavirus-california-governor-newsom-homeowners-assistance
What is a “Moratorium”? A moratorium period is a period during a loan term when the borrower is not obligated to make a payment. It is a waiting period before the borrower starts making payments again. These are similar to delays offered by Mortgagers during natural disasters.
Robert Broeksmit, president and CEO of the Mortgage Bankers Association said, “If homeowners have been laid off or had a drop in work hours, are ill or affected, there will be a program available to them to forbear mortgage payments. Generally it would be up to six months.” More available at: https://www.dallasnews.com/business/real-estate/2020/03/25/homeowners-who-cant-pay-their-mortgages-are-getting-help/
Eligible homeowners would be able to defer mortgage payments for at least three months and perhaps longer if they suffer hardship due to the pandemic. Late payments would not be reported to credit agencies. However, they would more than likely be added to the back end of the loan with interest added on.
Previously, HUD ordered a 60-day moratorium of foreclosures due to Coronavirus. Fannie Mae and Freddie Mac are also offering mortgage relief, as seen in this article: https://www.washingtonpost.com/business/2020/03/18/hud-orders-60-day-foreclosure-moratorium-homeowners-affected-by-coronavirus/
Other notable reliefs for California residents are: No late fees for 90 days on mortgages, no new foreclosures for 60 days, no credit score changes. There is also a moratorium making it illegal for landlords to evict residential tenants who are unable to pay rent because of loss of income from work, childcare costs related to school closures, healthcare costs, or “reasonable expenditures” related to COVID-19. Several commercial landlords are helping out in similar ways.
For additional information of many relief efforts in California and how to apply for relief, go to: https://covid19.ca.gov/get-financial-help/#top. There are also many other relief programs available at Need Help Paying Bills: https://www.needhelppayingbills.com/html/california_eviction_prevention.html
While mortgage delinquencies still remain near record lows, these steps will certainly go a long way toward staving off a severe downturn in the real estate market, caused by a flood of foreclosures.
We will all get through this and I am here to help in any way I can. You have more important things to worry about, than the roof over your head. My team and I may have just the answers you are looking for. In the mean time we wish you and your family good health. Call (714) 801-6230, email Scott@ScottStephens.com, browse a plethora of information at; www.OrangeCountyRealEstates.com