Author: Martin Austermuhle (www.wamu.org)
This story was updated on April 8. The votes may have come from their living rooms, but on Tuesday the D.C. Council unanimously approved an emergency bill extending additional relief to residents and businesses impacted by the coronavirus pandemic. The measure — approved during the Council’s first-ever virtual meeting, conducted via Zoom — puts a halt on rent increases during the ongoing public health emergency and 30 days after it ends and requires some mortgage companies to offer property owners a 90-day deferral on payments. It also prohibits debt collection lawsuits from being filed during and within 60-days of the end of the current state of emergency, bans telephone and internet cutoffs, offers consumer protections for families needing funeral services through the creation of a “Funeral Bill of Rights,” and gives older and frail incarcerated felons a means to have their sentences cut short. The bill also establishes a $25 million fund to reimburse local hospitals that add beds to deal with the pandemic, waives community service requirements for graduating seniors, and allows for the use of electronic wills. It authorizes the D.C. Board of Elections to send every voter an absentee ballot request form as a means to encourage as many people as possible to vote by mail, and lets Chief Financial Officer Jeffrey DeWitt borrow $500 million to address possible cash flow issues that could emerge over the summer due to the economic slowdown. “We are doing a lot of things for a lot of people,” Council member Robert White (D-At Large) said, referencing the two emergency bills the Council has passed in response to the pandemic. “We can’t do everything for everyone. I do want to note my disappointment that we have not been able to create a fund for workers who are not covered.” White was referencing the decision to exclude provisions from the bill that would have created a mechanism to offer financial assistance akin to unemployment benefits to undocumented and non-traditional workers like street vendors, day laborers and child care workers. “This virus and its economic impacts know no profession or immigration status, nor should the assistance we extend,” echoed Council member David Grosso (I-At Large). “They are vital to the fabric of our society, and they are hurting as much as the rest of us,” added Council member Brianne Nadeau (D-Ward 1). Chairman Phil Mendelson said the estimated cost of the two provisions — which he pegged at more than $75 million — prompted their removal, but he and Mayor Muriel Bowser have continued to discuss how to support undocumented residents who may not have access through federal and local programs. “It was priced out with a significant cost at a time when we are looking at a probably $607 million drop in revenue that we are going to have to close,” he said. “There continue to be discussions, I would say fairly energetic discussions, about how we can find relief for these undocumented workers who are otherwise getting little relief. That issue is not being ignored.” But during the debate, Council member Elissa Silverman (I-At Large) used Zoom’s chat function to push back against Mendelson’s claims about the cost, the 21st century equivalent of whispering in her colleagues’ ears. The mortgage relief portion of the bill also generated some concern. As written, the provision requires mortgage companies to offer certain borrowers 90-day deferrals of their payments. But some housing advocates said foreclosures should be stopped altogether. “What we really want is a moratorium,” said Jennifer Lavallee, an attorney at the Legal Aid Society, referring to one put in place in Maryland. The federal recovery bill passed by Congress last month has a similar moratorium, though only for homeowners with federally backed mortgages. (A first emergency bill passed in mid-March prohibits evictions during the emergency.) Mendelson did address another concern with that portion of the bill. The Council expanded the provision to require any property owner who gets a payment deferral to pass the savings to any tenants they have — whether a resident of a basement unit or a small business located in a strip mall. When the bill was originally written, the provision only applied to commercial tenants. During extended statements given from the comfort of their homes, lawmakers said they are taking aggressive steps to respond to the pandemic — and doing so under difficult circumstances. But they also said more was left to be done, notably to address how different communities are being impacted by the virus and how a recovery could help them. “When we look at history, it demonstrates that communities of color are typically left out or find themselves worse off when the experience crises like this. We need to use our resources for the least among us,” said Council member Kenyan McDuffie (D-Ward 5), who included a provision in the bill to offer more government contracts to local and minority-owned businesses. “Despite our best efforts, there are some that won’t fall within the bounds of our safety net.” But Council member Anita Bonds (D-At Large) sounded an optimistic note: “We are not done yet.” This story was updated to clarify who would qualify for mortgage payment deferral under the bill. For the full text of the article visit https://wamu.org/story/20/04/07/in-first-ever-virtual-meeting-d-c-council-passes-bill-freezing-rents-offering-some-mortgage-payment-deferrals/
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Fannie Mae, Freddie Mac will let borrowers facing hardship defer two months of mortgage payments3/31/2020 Author: Ben Lane www.housingwire.com
A recent report from Goldman Sachs suggested that a record-shattering number of people are filing for unemployment as the coronavirus cripples the nation’s economy. That’s why there’s likely going to be a giant surge in delinquent mortgages as many borrowers are unable to make their next mortgage payment. That’s also why the mortgage industry is asking the government to allow mortgage servicers to be able to provide affected borrowers with a 90-day break on their payments. While that solution would require some serious legwork (more on that here), the two biggest sources of mortgage financing are giving some leeway to borrowers who’ve fallen behind. Fannie Mae and Freddie Mac unveiled today a new “payment deferral” option that will allow borrowers facing a hardship to defer two months of their mortgage payments until the end of their mortgage. The program was set to be announced later this year, but with the coronavirus wreaking havoc on the country, the GSEs are rolling out the program early to give mortgage servicers another way to help borrowers now. The payment deferral option isn’t only available for borrowers facing a coronavirus-related hardship. To be eligible for the payment deferral program, borrowers must have faced a short-term hardship that caused them to miss one to two months of mortgage payments. If the borrower is able to resolve the hardship within that time period and has the financial ability to restart their mortgage payments in full, the borrower will be eligible to defer those two months of payments to the end of their mortgage without needing to significantly modify the loan. “This innovative relief solution addresses a unique hardship situation – homeowners who have resolved a short-term hardship,” Freddie Mac said in its announcement. “It aims to serve those homeowners with a more affordable workout that’s between a repayment plan and a modification. This is a broad offering that is aligned with Fannie Mae at the direction of the Federal Housing Finance Agency to assist more struggling homeowners.” Here, from Freddie Mac, is more detail on how the program works: At Freddie Mac, we recognize that some Borrowers experience temporary financial hardships resulting in an early stage Delinquency that cannot be solved by a reinstatement or repayment plan, but also do not require the more extensive modification of terms that a Freddie Mac Flex Modification would provide. The Payment Deferral is designed to provide relief to eligible Borrowers who have the financial capacity to resume making their monthly payments, but who are unable to afford the additional monthly contributions required by a repayment plan. An eligible Borrower will be brought current by deferring delinquent principal and interest (P&I), creating a non-interest bearing forborne balance that will become due at the earlier of the Mortgage maturity date, payoff date, or upon transfer or sale of the Mortgaged Premises. The remaining Mortgage term, interest rate schedule (i.e., whether a fixed-rate Mortgage, an ARM or Step-Rate Mortgage), payment schedule and maturity date of the Mortgage will all remain unchanged. To put it in simpler terms, the GSEs will allow certain borrowers to defer two months of their mortgage payments until their mortgage ends or they sell their house. According to the GSEs, mortgage servicers must begin borrower evaluations for the payment deferral program no later than Jan. 1, 2021, but servicers may begin using this new option with eligible borrowers as early as July 1, 2020. For more on the program, watch the video below or click on any of these links. For the full text of the article, please visit https://www.housingwire.com/articles/fannie-mae-freddie-mac-will-let-borrowers-facing-hardship-defer-two-months-of-mortgage-payments/ Author: Ben Lane www.housingwire.com
Mortgage relief options are coming fast and furious as the entire country struggles to deal with the spread of the coronavirus. This week, the Department of Housing and Urban Development, Fannie Mae and Freddie Mac announced that they are suspending foreclosures and evictions for at least 60 days. That was followed by the state of New York declaring that certain borrowers in the state could forgo their mortgage payments for up to 90 days. Now, one of the nation’s biggest banks is joining New York in stating that borrowers can pause their mortgage payments. Bank of America announced Thursday afternoon that it is extending “additional support for consumer and small business clients experiencing hardship from the impact of the coronavirus.” Included among those support options is the ability to defer mortgage payments. According to the bank, Bank of America mortgage and home equity customers can request to defer their payments while the virus crisis rages. The payments would then be added to the end of their loan. Basically, borrowers can get a break on their payments now but will have to make those payments eventually. According to the bank, the payment deferral will be available on a case-by-case basis and can be extended on a month-to-month term. It should be noted that this policy applies to loans held on Bank of America’s books, not to those backed by Fannie, Freddie, the Federal Housing Administration, etc. As for those loans, Bank of America said that it is following each agencies’ policies, which are detailed here. The bank added that there will be no negative credit bureau reporting for up-to-date clients. But that’s not the only steps Bank of America is taking for its 66 million consumer and small business clients. The bank is also pausing foreclosure sales, evictions and repossessions. Beyond that, the bank is taking several other non-mortgage-related steps, including:
The bank said that its client-facing employees are “trained to identify and assist impacted clients and provide the right support to address their unique needs.” Borrowers facing hardship due to the coronavirus are encouraged to contact the bank’s client services team for assistance. “Our clients rely on us every day and for every aspect of their financial lives,” said Dean Athanasia, president of consumer and small business at Bank of America. “We’re going to continue to provide convenient access to the important services they count on, and the additional assistance and support they need during this difficult period,” Athanasia added. “Our priorities are taking care of our team and each other, and continuing to fulfill our fundamental role serving our clients.” [Update: This article is updated with additional information on Bank of America’s policies.] For full text of the article, please visit https://www.housingwire.com/articles/bank-of-america-will-allow-borrowers-to-pause-their-mortgage-payments/ Effective March 16, 2020, by Administrative Order of the Court:
For full text of the order visit https://www.dccourts.gov/coronavirus Effective March 18, 2020, by Administrative Order of the Maryland Court of Appeals:
For the full text of the order visit https://www.courts.state.md.us/sites/default/files/admin-orders/20200318suspensionofforeclosuresevictions.pdf Protect yourself financially from the impact of the coronavirus
Leer en Español Author: Consumer Financial Protection Bureau Federal, state, and local governments are working to respond to the growing public health threat of coronavirus, or COVID-19 As communities across the country are dealing with an increase in the number of reported cases, many areas may be impacted by the temporary closure of businesses, schools and other public facilities or events, and in some cases, quarantines. While these actions are necessary steps to help reduce exposures, it may bring financial uncertainty for many people who could experience a loss of income due to illness or workplace closures. As you plan for the potential impact of the coronavirus, there are a number of steps that you can take to help protect yourself or a loved one financially, both in the short and long term. Keep reading for steps to take in the following situations:
Contact your lenders and loan servicersIf you’re not able to pay your bills on time, contact your lenders and servicers to let them know about your situation. Being behind on your payments can have a lasting impact on your credit. The CFPB and other financial regulators have encouraged financial institutions to work with their customers to meet their community needs. Credit card companies and lenders may be able to offer you a number of options to help you. This could include waiving certain fees like ATM, overpayments, and late fees, as well as allowing you to delay, adjust, or skip some payments. When contacting your lenders, be prepared to explain:
If you have student loans, you may qualify for a delayed or reduced payment program. Just remember, even though you don’t need to make payments now, interest will continue to accrue, and you will have to make up these amounts eventually. Contact your student loan servicer to find out more about your options. If you have a federal student loan, also ask your servicer about alternative repayment plans . Work with housing and credit counselors to understand your optionsThese trained professionals provide advice for little or no cost, and they will work with you to discuss your situation, evaluate options, and even help you negotiate with your lenders and servicers.
Contact debt collectorsIf you currently have a debt in collections, you can work with collectors to identify a realistic repayment plan. The Bureau offers a number of resources for contacting and negotiating with debt collection companies. Check your credit reportsIf you’re working with lenders on payment assistance programs or forbearance, routinely check your credit reports to make sure the statements are accurate and that any delinquencies have not been improperly reported. Your credit reports and scores play an important role in your future financial opportunities. What to do if you lose your incomeState and local governments vary in the programs and offerings to help those financially impacted by the coronavirus. You can look to your state’s unemployment policies to identify current options for benefits. Your state's public health office may also have information. Older adults may be impacted by the coronavirus and quarantine procedures in different ways than the general public. There may be government benefits available to older adults who need financial help. Visit benefitscheckup.org for more information and to see if you qualify for any state or local assistance. Be aware of potential scam attemptsScammers look for opportunities to take advantage of the vulnerable, especially during times of emergencies or natural disasters. Be cautious of emails, texts, or social media posts that may be selling fake products or information about emerging coronavirus cases. The Federal Trade Commission has tips to protect yourself from possible coronavirus-related scams The FTC and the Food and Drug Administration have also cautioned consumers to be on the look-out for sellers of unapproved and misbranded products, claiming they can treat or prevent coronavirus. Learn more about how to prevent, recognize, and report fraud and scams. Protecting Older AdultsScammers often target older adults because they may have more assets or regular income in the form of retirement benefits or savings and because they’re often more polite and trusting than other age groups. As older adults are at a higher risk for serious illness they may also be isolating themselves. Social isolation is already an issue for older adults and can lead to a host of issues, including an increased likelihood of falling for scams due to a need to connect to others. This issue could grow in response to virus prevention tactics like social distancing and quarantines. Phone calls and video chats can help older adults and their families connect during this period where health officials encourage limiting contact. Older adults, as well as their family members should be aware of common types of scams, as well as how to prevent and report them. Our Money Smart for Older Adults Resource guide can help. Need more help. If you have a problem with a financial product or service, try reaching out to the company first. Companies can usually answer questions unique to your situation and more specific to the products and services they offer. We can also help you connect with the company if you have a complaint. You can submit online or by calling (855) 411-2372. Companies generally respond within 15 days. The company may contact you directly to confirm information provided in your complaint before it responds. In some cases, the company will let you know their response is in progress and will provide a final response within 60 days. Editorial note: This blog was originally posted on March 13, 2020 and has been updated to reflect new information. For the full text of the article visit https://www.consumerfinance.gov/about-us/blog/protect-yourself-financially-from-impact-of-coronavirus/ Author: Ben Lane www.housingwire.com
Cities and states across the country are already suspending evictions and foreclosures in response to the spread of the coronavirus, but the federal government is taking the biggest step so far to keep people in their homes. President Donald Trump announced Wednesday that the Department of Housing and Urban Development is suspending all foreclosures and evictions until the end of April. Beyond that, the Federal Housing Finance Agency announced Wednesday that it is directing Fannie Mae and Freddie Mac to suspend foreclosures and evictions for “at least 60 days.” That would mean the moratorium lasts through mid-May, at least. According to the FHFA, the foreclosure and eviction suspension applies to homeowners whose single-family mortgage is backed by either Fannie Mae or Freddie Mac. “This foreclosure and eviction suspension allows homeowners with an Enterprise-backed mortgage to stay in their homes during this national emergency,” FHFA Director Mark Calabria said in a statement. Given that Fannie and Freddie are the largest mortgage financers in the country, the move is a sizable one. “As a reminder, borrowers affected by the coronavirus who are having difficulty paying their mortgage, should reach out to their mortgage servicers as soon as possible,” Calabria added. “The Enterprises are working with mortgage servicers to ensure that borrowers facing hardship because of the coronavirus can get assistance.” Earlier this month, the FHFA and HUD reminded mortgage servicers of their options for borrowers affected by the COVID-19 outbreak. Included among those options is payment forbearance, which would allow affected borrowers to suspend their mortgage payment for up to 12 months due to hardship caused by the coronavirus. As for HUD, Trump made the announcement during a Wednesday press conference discussing the growing impact of COVID-19. “The Department of Housing and Urban Development is providing immediate relief to renters and homeowners by suspending all foreclosures and evictions until the end of April,” Trump said. “So, we’re working very closely with Dr. Ben Carson and everybody from HUD.” JUST IN: Pres. Trump says HUD will be "suspending all foreclosures and evictions until the end of April" amid coronavirus pandemic. https://t.co/piDsmnkG0y pic.twitter.com/6cnBMYDqrz — ABC News (@ABC) March 18, 2020The move comes at a time when civil courts and other housing authorities are shutting down in the wake of virus, so it’s unlikely that many jurisdictions would even be able to process evictions and foreclosures at this point. Foreclosure and eviction moratoriums are not a new step, but the government usually puts them in place in areas that suffered a natural disaster. But the spread of the virus has necessitated a nationwide moratorium. HUD has not made an official announcement on the policy to this point, but this article will be updated when HUD makes it official. In its announcement, the FHFA said that it will “continue monitor the coronavirus situation and update policies as needed.” For full text of article visit https://www.housingwire.com/articles/fannie-mae-freddie-mac-hud-suspending-all-foreclosures-and-evictions/ Consumer Financial Protection Bureau
Office of Communications www.consumerfinance.gov WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) today announced a settlement with BSI Financial Services (BSI), a mortgage servicer headquartered in Irving, Texas. BSI Financial Services is the operating name for Servis One, Inc. The Bureau found that BSI violated the Consumer Financial Protection Act of 2010, the Real Estate Settlement Procedures Act, or the Truth in Lending Act by: • Handling mortgage servicing transfers with incomplete or inaccurate loss mitigation information. This resulted in failures to recognize transferred mortgage loans with pending loss mitigation applications, in-process loan modifications, and permanent loan modifications; • Handling mortgage servicing transfers with incomplete or inaccurate escrow information resulting in untimely escrow disbursements; • Inadequately overseeing service providers, resulting in untimely escrow disbursements to pay borrowers’ property taxes and homeowners’ insurance premiums; • Failing to promptly enter interest rate adjustment loan data for adjustable rate mortgage (ARM) loans into its servicing system, resulting in BSI sending monthly statements to consumers that sought to collect inaccurate principal and interest payments; and • Maintaining an inadequate document management system that prevented BSI’s personnel or consumers from readily obtaining accurate information about mortgage loans. Under the terms of the consent order, BSI must, among other provisions, pay a civil money penalty of $200,000 and pay restitution estimated to be at least $36,500. It must also establish and maintain a comprehensive data integrity program to ensure the accuracy, integrity, and completeness of the data for loans that it services, and implement an information technology plan to ensure BSI’s systems are appropriate give the nature, size, complexity, and scope of BSI’s operations. The consent order is available at: https://files.consumerfinance.gov/f/documents/cfpb_servis-one-inc-BSI-financial-services_consent-order_2019-05.pdf www.cnbc.com (Author: Darla Mercado)
Some major banks are offering assistance to help customers who are affected by the government shutdown. Congress and President Donald Trump have been at a standoff over funding for a border wall. In all, about 800,000 federal employees are expected to be furloughed or working without pay. Affected workers are already grappling with incoming bills. The U.S. Office of Personnel Management’s verified Twitter account posted sample letters for federal workers to use with landlords and creditors as they seek relief for payments. Several banks have stepped up to provide federal employees with help through existing consumer assistance programs. Wells Fargo said it will consider reversing overdraft fees for customers whose income has been disrupted due to the shutdown. Further, mortgage, loan and credit consumers may qualify for forbearance or other payment assistance programs. What exactly consumers can qualify for will depend on their individual circumstances, said Tom Goyda, a spokesman for Wells Fargo. Click here for more information on the bank’s program. Bank of America has also offered some help for affected clients. “Our Client Assistance Program is available and designed to help clients experiencing financial hardship,” said spokesman Lawrence Grayson. The relief that consumers can receive will depend on the particulars of their situations, but may include fee waivers, loan modifications and more, he said. Consumers can call the bank’s assistance line at (844) 219-0690. Chase, the consumer banking arm of JPMorgan Chase & Co., said it would assist clients affected by the shutdown, encouraging them to call its special care line at 1-888-356-0023. Citi has also said that it’s offering assistance for clients facing hardship. Click here for a list of federal agencies and their contingency plans amid the shutdown. Here’s how federal workers can shore up their finances and get through any lean times ahead. Get on the phone. Get in touch with the federal agency you work for to determine whether you are being furloughed and find out what resources are available. In some cases, federal credit unions are offering furlough relief loans to help affected workers remain afloat in the short-term. For instance, the Congressional Federal Credit Union has a relief line of credit with an initial rate of 0 percent for 60 days. After that, the rate on the remaining balance is 4 percent. Tighten your budget. If you’re about to be less flush this month, draw up your monthly budget and see what you can slash during the shutdown, said Marguerita M. Cheng, a certified financial planner and CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland. If you have outstanding loans, including mortgages and student debt, be sure to contact your creditors to make them aware of your situation. “Most agencies also have a process in place for employees that they can use to reach out to creditors and landlords to ask for some relief,” said Patrick Amey, a CFP at Aspyre Wealth Partners in Overland Park, Kansas. Tap emergency cash. If you’re unsure about your next paycheck, this is the time to turn to your emergency fund as a backstop. The standard rule of thumb is to maintain enough cash to cover three months to six months of expenses, said Bryan Beatty, a CFP and partner at Egan Berger & Weiner in Vienna, Virginia. The next best alternative could be a zero-interest furlough loan or line of credit from a federal credit union, Beatty said. Remember, the zero-interest period runs for a limited time — typically up to 60 days. If you already have a home equity line of credit open and available for draw-down, this might be a potential source of emergency funding. Consider that the average rate on a so-called HELOC is 5.64 percent, compared with the average credit card rate of 17.56 percent, according to Bankrate.com. The downside of taking out a HELOC is that the interest rates tend to be variable. Further, if you’re using the line of credit for purposes other than renovating your home, you won’t be able to deduct the interest on your taxes. Avoid using this money if you can. Not all pots of cash are there for the taking. For instance, a loan from your retirement plan would put a dent in your long-term savings. You’ll also need to repay the cash or face taxes on the amount you borrowed. Another source of cash to avoid would be credit cards and cash advances. Interest rates exceed 17 percent on credit cards, while cash advances could have up to 5 percent in additional charges, according to MagnifyMoney. Finally, margin loans — in which you borrow from your brokerage account — could deal a significant blow to your finances. That’s because your brokerage firm will require you to maintain a minimum balance in your account when you borrow against your investments. In the event of a sharp market decline, your balance could fall below the required minimum. In that case, your brokerage firm will make a margin call and you could have less than 24 hours to deposit even more cash into your account or else the firm will sell your holdings. https://www.cnbc.com/2019/01/02/wells-fargo-bank-of-america-to-assist-clients-amid-shutdown.html www.housingwire.com (Author: Ben Lane)
The federal government is asking the mortgage industry to help unpaid federal workers and contractors with their mortgage payments because they may not be able to make those payments due to the government shutdown. The Federal Housing Administration announced late Tuesday that it is calling on all approved mortgagees and lenders to be “sensitive to the financial hardships experienced by borrowers as a result of the shutdown,” including borrowers who are subject to furlough, layoff, or a reduction in income due to the shutdown. Newly released data from Zillow shows that federal employees who own homes make about $249 million in mortgage payments each month. The Zillow report did not disclose how many of those have mortgages that are insured by the FHA, but the number is certainly greater than zero. As such, the FHA is asking the mortgage industry to aid federal workers who aren’t getting paid right now because the government is shut down over funding for President Donald Trump’s border wall. The FHA sent a letter Tuesday to mortgagees and lenders, reminding them of their “ongoing obligation to offer special forbearance to borrowers experiencing loss of income,” even if that loss of income is from the government itself. “In accordance with longstanding policy, FHA expects mortgagees to assist borrowers experiencing a loss of income,” FHA Commissioner Brian Montgomery said in the letter. The FHA said that it expects the mortgage industry to “make every effort to communicate with and assist affected borrowers to the greatest extent possible,” in at least the following ways:
To read the FHA’s full letter to the mortgage industry, click here. https://www.housingwire.com/articles/47875-fha-asks-mortgage-industry-to-help-unpaid-federal-workers-with-their-mortgages |