We don’t mean to be a pest with these updates, but information about mortgage and consumer issues that may impact our clients, former clients and friends is flowing at a fast and furious pace.
Before outlining the evolving responses to the financial hardship caused by the emergency, I want to take a moment to discuss the long-term effects of this emergency. The fact is the job losses, foreclosures, repossessions, and other types of financial stress caused by the crisis will negatively impact the health of millions of Americans years after the threat of contracting Covid-19 fades.
I know this true from both personal and professional experience. On the personal side, my father committed suicide after losing most of his retirement savings when the tech bubble burst in 2000. From a professional perspective, I worked alongside thousands of clients, including many of you, who faced serious financial, personal, and health challenges in the wake of the 2008 collapse of the housing market. I’m proud that we were able to overcome those challenges and forge a path back to financial security.
But as we confront the possibility that one in five Americans will be out of work for an extended period of time, the potential failure of millions of businesses, and growing insecurity about shrinking retirement savings, we must acknowledge the need to take steps to prevent a pandemic of depression, suicide and addiction among our family, friends and neighbors.
When I look back at the courage and optimism that enabled our clients to triumph over adversity in the past, I am confident we all have the capacity to find humor and optimism in situations that appear dire and hopeless. I want you to know that we are here to help and that it will be our privilege to serve you in the weeks, months, and years ahead.
But remember, we can’t help if you don’t call.
It’s especially important for you to contact us now because some information you may be receiving via traditional or social media is inaccurate or incomplete. We are at work and available to answer questions or help at 877-475-8100 or firstname.lastname@example.org. You are also welcome to call Marc’s cellphone: 330-651-3131
Information regarding Foreclosure Stays or Prohibitions
What is True:
Today the Federal Government announced that no foreclosures will proceed in the next 60 days on loans that are insured by the Federal Housing Administration (FHA) or that are owned by Freddie Mac or Fannie Mae. While that covers a lot of loans most people don’t know the name of the owner or insurer of their loan, they only know the name of the company that collects the payments or servicer of their loan.
Further complicating the implications of this order is the fact that in the last few years the FHA, Fannie and Freddie have sold off hundreds of thousands of loans that they formerly insured or owned and many of those homeowners might incorrectly think that this particular decision applies to their loans. If you don’t know who owns your loan and you are facing foreclosure in the next 60 days reach out to us or your loan servicer to find out for sure.
In addition, some Ohio Counties (including two of the largest Cuyahoga and Hamilton) and some states (including New Jersey) have passed laws or issued court orders staying foreclosure cases, sheriff’s sales and foreclosure related evictions for 60 days. These orders apply to all loans. Ohio Chief Justice Maureen O’Connor is scheduled to speak at the Governor’s news conference at 2 p.m. today and she may share further news for Ohioans facing foreclosure.
Also, Ohio Senator Sherrod Brown has introduced legislation under the Real Estate Settlement Procedures Act to prohibit all foreclosure activity nationwide, to allow up to a six-month forbearance (not forgiveness) followed by an extension of the loan and requiring servicers to evaluate the loan for a modification for those impacted. That law has not passed and has a long road ahead in the U.S. Congress.
If you have a pending foreclosure case anywhere, call us to verify the status of your individual case and discuss strategy for how to most effectively move forward toward a positive resolution for you and your family.
What is not true:
No order or law that we are aware of (even those proposals discussed above) relieves mortgage loan borrowers, student loan borrowers or other consumer debtors from paying the debts or the payments that are due this month or in the future. Our advice about how to approach the situation if you can’t make payments is here. This patchwork of rules by state and local governments and courts will create an accounting nightmare as we recover from this crisis. Among other problems, a suspension of payments would throw escrow calculations off balance and cause increases in monthly payments down the road. Pay close attention to your mortgage statements in the coming days and months and reach out to us for help or to your mortgage servicer in writing if you have questions or concerns.
Nothing in the law that we are aware of prohibits mortgage companies or other creditors from reporting missed payments, even those that may be allowed by law. Once again, Sherrod Brown has proposed a bill to put a moratorium on credit reporting but that bill is a long way from law.
The bottom line is: if you can pay your mortgage and other obligations try to do so. Many of our clients have very favorably modified loans with payments that are affordable. Those arrangements can be upended if escrow increases because of missed payments or the loan has to be modified again. Many others have worked hard after foreclosure or bankruptcy to raise their credit score. We all have to balance payment priorities at this time and we just wanted to make sure that you were as informed as possible.
Paid Sick Days are only for Some Workers
What is True:
A law has been passed to require companies to provide paid sick leave related to the COVID-19 virus to certain workers but millions of workers are exempted including those who work for companies with more than 500 employees and some companies with less than 50 employees. Here is a good summary of who gets it. Employers can recover costs later through tax credits.
More good news:
Fifth Third Bank will not foreclose, evict or repossess cars for 60 days. Read about it here.
No Utility Shutoffs in Ohio. Cleveland.com report. But remember you still owe the bill and at some point it is going to have to be paid.