Protecting Your Finances During the Pandemic: Housing Assistance

The current pandemic has caused rising unemployment rates, and a significant loss of income for many people. Some individuals and families are wondering how to protect themselves from losing their assets and how to remain financially afloat  This blog will concentrate on housing assistance and some resources to help individuals remain in their homes.

For mortgage and housing assistance, The Consumer Finance Protection Bureau (CFPB) , Federal Housing Finance Agency (FHFA) and U.S. Department of Housing and Urban Development (HUD) are working together to assist homeowners and renters to keep their residences. A federal law is in place to protect those homeowners with federal backed mortgages (FHA, VA, USDA, Fannie Mae, and Freddie Mac). Homeowners can reach out to their loan servicer for information on forbearance or deferred payments. The CARES Act remains in place for loans backed by the Federal government until August 31, 2020, which will prevent foreclosure judgment on home loans. After the deadline has passed, reach out to the loan servicer for a forbearance. An extension for another 180 days for a total of 360 days may be granted. During forbearance, additional fees, interest, or penalties should not be added to your account. Make sure you check with your loan servicer concerning terms and conditions of the loan.

If you do not have a federal backed mortgage, there are still options.  Again, reach out to your loan servicer for an extension or forbearance and contact the servicer as early as possible. Many loan servicers are offering relief for homeowners, but homeowners must ask for this assistance. After receiving mortgage assistance, there are steps to follow to protect from financial loss:

  • Keep written documentation on hand
  • Pay attention to your monthly mortgage statement
  • Stop or change auto-payments 
  • Keep an eye on your credit reports
  • Once income is restored, contact loan servicer and resume payments
  • If you need extra time, file for a forbearance
  • During forbearance, save any extra money and store in a savings account to use toward mortgage payments when the forbearance period is over
  • Check property taxes and homeowners insurance with your loan servicer since these are typically part of the mortgage payment. Make sure the escrow account has the funds to maintain paying these items on time

If you are renting and have housing assistance, housing vouchers, or federal subsidized housing, the CARES Act will protect from evictions from March 27, 2020 to July 24, 2020. After the deadline, check to see if there are payment extensions or forbearance for loans. If you are having problems paying your rent, whether you have federal assistance or not, it is best to contact the housing authority or the landlord. Some states and local governments have stopped evictions because of the pandemic. Landlords are also protected by the CARES Act if their rental property has federal subsidized housing programs or a federal backed mortgage. They can use this relief assistance for renters.

Some measures that have been taken to protect renters are:

  • Prohibit any eviction notices or legal actions
  • Stopped all court eviction hearings
  • Stopped enforcing eviction orders or judgments

For information on state and local eviction and foreclosure limits, visit the Eviction Lab website to find out if your state or local government has eviction protections at https://evictionlab.org/covid-policy-scorecard/, opens a new window

Sources:

Consumer Financial Protection Bureau. Protecting Your Finances During the Coronavirus Pandemic., opens a new window

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