No crisis lasts forever; most areas of the US are moving from the 24/7 focus on an imminent, undefined catastrophe toward a more sustainable mode of managing COVID-19 and the related issues it presents. We don’t know what the new “normal” will look like yet. With apologies to Tom Petty, waiting is the hardest part.
There has been significant misinformation about the mortgage relief available to people affected by COVID-19; many people were told they would have to pay all past due mortgage payments in full at the end of the forbearance period. That arrangement would provide little or no real help to people who lose income.
The Consumer Financial Protection Bureau has prepared a Consumer Relief Guide that provides information on borrowers’ rights. You can find the guide at https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/
In short: borrowers who have a loan guaranteed by a federal government agency or enterprise (like the Veterans Administration, Fannie Mae, or Freddie Mac) who are affected by COVID-19 can request an initial forbearance of up to 180 days, and may request a second forbearance of 180 days if needed. During the forbearance period, mortgage payments will be reduced or suspended without penalty. Most borrowers will have several options for repayment, so the unpaid amounts will not have to be repaid in full immediately at the end of the forbearance period; depending on the lender and loan program, the amounts can be repaid over time or added to the end of the mortgage period. The most important thing is to contact your lender as soon as possible to discuss the best arrangement for you.
Proceed with Caution and Common Sense
Whatever your beliefs about COVID-19, there is substantial evidence that the disease can cause significant health problems up to and including death. Older adults and people with chronic health conditions are most at risk. The roll-back of shelter-at-home orders and other government mandates does not automatically change those risks. I encourage everyone to monitor the conditions where you live: are cases increasing or decreasing? are people visiting your area coming from places where there are more cases? before deciding whether to go out or what precautions to take. If you feel sick or have had contact with someone who is sick, call your health care provider or local Public Health Department.
More to Follow as information becomes available. Keep Calm and Carry On.