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Mortgage relief 101: How to get through the COVID-19 crisis if you can't make your house payment

If you've lost your job and can't pay your mortgage, it's important to know there could be some options to help you get through the COVID-19 pandemic.

CHARLOTTE, N.C. — As the WCNC Charlotte Consumer Investigator, I have been receiving lots of emails and questions about what to do if people can’t pay their mortgage right now because of lost wages or a lost job. 

I know many have issues with getting through to unemployment, and I am working on that as well, but first, let’s deal with mortgages and what to do if you are a renter.

I emailed three of the top banks asking what their relief programs look like now and what options you might need for mortgages.

Bank of America

“For Bank of America-owned mortgages, we are offering up to 90 days of deferred payments for people suffering a hardship related to COVID-19 with payments added to the end of the term of the mortgage. We also have said that if the crisis lasts longer than 90 days we will extend the deferral period until it is over.  For mortgages that we service on behalf of other entities (mostly that would be Fannie Mae and Freddie Mac), we follow their direction for client relief. In the beginning weeks of the crisis that has been 90 days of deferred payments with choices at the end of that 90 days to either: pay the three months deferred payments then; add an amount to future payments to catch up; or add additional payments at the end of the term of the loan. The CARES Act included direction to these “government-sponsored entities” to offer up additional time, if necessary. 

To make it easy for clients, we have established an online Help page where people can defer credit card, mortgage and auto loan payments online at www.BankofAmerica.com/Coronavirus

There is no documentation required. It is granted upon request from a client asserting a hardship. Given the simplicity of it, it’s all very quick and we encourage people to do it online if they can if they have suffered a hardship. The only people who can’t do this simply are people who were already significantly behind on their payments (those folks require a conversation). A client can make a request to pay part of their mortgage if they’d prefer during this period.  

In terms of cost, there is no special fee for deferring and we don’t make any reports to credit bureaus, etc. Interest on the mortgage loan (these days most loans would be around 4 or 5 percent) does continue to accrue during the deferral period and can be paid at the end of the loan or whenever someone wanted to pay it"

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Truist Bank, the former SunTrust and BB&T

Truist Mortgage is actively engaged with clients who are affected by the COVID-19 pandemic and is helping them in a number of ways. Our Home Preservation Team is working directly with our clients to determine the best solution to meet their unique needs and ensure that they are able to sustain homeownership during this extraordinary, challenging time.

Current Mortgage Clients

  • We are working closely with a number of government agencies, including the VA, FHA, Fannie Mae, Freddie Mac, and USDA, to provide the most current mortgage relief options based on the latest guidelines from the recently passed CARES Act. This includes a foreclosure moratorium of federally backed mortgages for at least 60 days beginning from March 18, 2020.
  • Like many mortgage lenders, we are experiencing longer than usual hold times in our call centers due to the high number of clients who need help. We’re actively working to streamline this process and are adding additional representatives to assist clients. In the meantime, we encourage clients to visit our special mortgage website here for the most up-to-date information and frequently asked questions concerning assistance with mortgage relief during COVID-19.

Option to Suspend Mortgage Loan Payments

Individuals impacted by COVID-19 events may request a mortgage payment forbearance. However, there is broad confusion and misunderstanding among consumers about how forbearances work. Forbearance is not payment forgiveness. Clients must pay back the entire forbearance amount after their forbearance period ends. If a client cannot afford to repay the deferred amount in a single payment at the conclusion of the forbearance period they have three other options to repay their suspended payments: (1) a repayment plan, (2) a loan modification, or (3) payment at the end of the loan term. The options available to the client depend upon the client’s loan type and specific financial circumstances.

Our standard forbearance period is three months. However, in this COVID-19 environment we are offering initial forbearance periods of either 90 or 180 days, with possible extension of the forbearance period for up to a year as circumstances warrant. No additional late fees or penalties are incurred and the account will not be reported to the credit bureau agencies as delinquent as a result of entering the forbearance.

  • Clients can apply online for a forbearance at the Truist Mortgage website. For heritage BB&T click here. For heritage SunTrust click here. Also, the site has a chat feature to quickly answer client questions on a variety of topics.

We recognize not all clients may be able to pay all of the suspended payments in a lump sum at the end of a forbearance period. We will work with clients before the end of their forbearance to explore repayment options available for their individual loan product and circumstances, including loan modifications.

A loan modification restructures an existing loan’s terms to help the borrower retain their home despite financial difficulties, including alternative ways to repay the amounts suspended during the forbearance period. There are different considerations for each borrower to assess, and multiple types of loan modifications. Criteria such as loan type and/or account status will determine what modification options are available to each individual borrower.

Clients Seeking a New Mortgage Loan

  • Clients may benefit from the current interest rate environment by potentially lowering their monthly payments through refinancing. Because of the challenges created by COVID-19, which may impede getting loans closed in a timely manner, we’ve extended the rate lock period on refinances to 90 days.
  • We have many clients with new mortgage loans currently in process and we are working hard to keep their loan closing on track:
  • Some county courthouses have closed or there may be delays. We’re working with each county individually to see if electronic recording capabilities are available. If not, we’ll work with our title insurance partners on all available interim options.
  • We can receive secure loan documentation via the online portal, email, regular mail or fax. If these options aren’t available, a client should contact their loan officer to make special arrangements. SunTrust and BB&T (now Truist) do not currently offer electronic signatures for closing documents.
  • When a full appraisal is required, an appraiser needs to complete an interior and exterior inspection of the home. We’re prepared to follow the guidance from government agencies and offer flexibility if an appraiser, after speaking with the client, determines that an interior appraisal is unattainable.
  • Loan documentation expiration dates for paystubs, bank statements, etc., are based on government and agency guidelines. We’re currently working with these organizations to identify available extensions and alternatives.
  • Employment verification is required prior to loan closing. We’ll make every attempt to validate employment, but if we’re unable to do so, a closing may be delayed.

Wells Fargo Bank

Wells Fargo Bank responded with this comment: “Per your inquiry, at the end of the initial three month payment suspension, Wells Fargo has a number of potential options available for mortgage and home equity customers. Depending on the loan investor and other factors, those options could include a continuation of the payment suspension, moving the missed payments to end of the loan or a modification to address longer-term financial changes that may impact their ability to keep up with their monthly payments. We’ll need to talk with them directly to understand their circumstances and identify the best way to help them going forward.”

What if I'm a renter?

If you are a renter, the Cares Act, passed recently by Congress and signed by President Trump, prohibits evections through July 25th, a deadline which may be extended.  Congressman Richard Hudson told me there is discussion on Capitol Hill about more stimulus money but the how and when of it is currently up in the air.  The Congressional Research Service summarized rent issues this way under Cares:

“The COVID-19 pandemic has disrupted business operations nationwide, leading to dramatic job losses that threaten the ability of many to meet their financial obligations, including housing rental payments. To aid individuals and businesses harmed by the pandemic, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136). Section 4024 of the CARES Act provides a temporary moratorium on eviction filings as well as other protections for tenants in certain rental properties with federal assistance or federally related financing. These protections are designed to alleviate the economic and public health consequences of tenant displacement during the COVID-19 outbreak. They supplement temporary eviction moratoria and rent freezes implemented in states and cities by governors and local officials using emergency powers. While Section 4024’s tenant protections are narrower in scope than those proposed by some lawmakers, called for by some tenant-advocates, or enacted in some other countries, they represent arguably unprecedented action by the federal government in an area of law that, largely, states and localities traditionally govern. Thus, questions remain about the law’s effects on tenants, landlords, and rental markets. 

Eviction and Rental Payment Protections CARES Act Section 4024(b) prohibits landlords of certain rental “covered dwellings” from initiating eviction proceedings or “charge[ing] fees, penalties, or other charges” against a tenant for the nonpayment of rent. These protections extend for 120 days from enactment (March 27, 2020). Section 4024(c) requires landlords of the same properties to provide tenants at least 30 days-notice before they must vacate the property. It also bars those landlords from issuing a notice to vacate during the 120 day period. In contrast to the eviction and late fee protections of Section 4024(b), which are expressly limited to nonpayment, Section 4024(c) does not expressly tie the notice to vacate requirement to a cause. Thus, Section 4024(c) arguably prohibits landlords from being able to force a tenant to vacate a covered dwelling for nonpayment or any other reason until August 23, 2020 (i.e., 120 days after enactment, plus 30 days after notice is provided). Section 4024(b)’s and (c)’s protections, however, do not absolve tenants of their legal responsibilities to pay rent. Tenants who do not pay rent during the eviction grace period may still face financial and legal liabilities, including eviction, after the moratorium ends…The CARES Act does not address how landlords can respond to missed payments after the moratorium ends. While the act bars landlords from charging late fees and other penalties because of a tenant’s nonpayment during the 120 days, whether late fees and interest on rental payments are prohibited from accruing during the grace period and being charged after it ends is unclear. After the 120-day period, landlords presumably could move to evict tenants who did not meet their rental obligations, subject to the CARES Act’s 30-day notice requirement and consistent with state and local laws. Whether an eviction wave will come at the end of the moratorium is unclear. Landlord eviction decisions will likely be affected by local rental market conditions at the time, including the extent to which other renters have suffered financial hardship during the pandemic, and whether landlords can successfully negotiate repayment plans with tenants.”

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