Having problems paying your mortgage? Facing possible foreclosure? Get a free housing counselor by calling 1-877-894-HOME (4663)!
If you are having problems paying your mortgage (or believe that you may in the future), or if you are behind on your payments and facing foreclosure, you need a housing counselor to assist you in reviewing the many, many programs currently available to assist homeowners.
The Attorney General’s Office cannot represent individuals, but we do assist you by helping to fund homeowner relief projects that include housing counselors. We have contributed to programs that fund housing counselors and legal services. A certified housing counselor can assist you even if you are not currently facing foreclosure. The services are free of charge. An appointment with a housing counselor can be scheduled by calling 1-877-894-HOME (4663).
Dealing with a mortgage or foreclosure issue is not a do-it-yourself endeavor. We strongly suggest that you do not try to go it alone. You need the assistance of a housing counselor.
Protections for homeowners in the face of COVID-19
The CARES Act:
For homeowners with federally backed loans:
- The CARES Act provides two major protections for homeowners with federally backed loans:
- A foreclosure moratorium; and
- A right to forbearance (a pause or reduction on mortgage payments for a limited period of time) for homeowners who are experiencing a financial hardship due to the COVID-19 emergency. Borrowers must attest to financial hardship to receive the forbearance; they will not be automatically granted.
- Nearly half of mortgages nationwide are owned or backed by Fannie Mae or Freddie Mac; these loans are federally backed, as are FHA and USDA loans, and some other types of loans.
- Homeowners can look to see if their loan is backed by Fannie Mae here:
- And by Freddie Mac here:
- For those with mortgages backed by Fannie or Freddie, if you are granted a forbearance, you will not incur late fees, will not have delinquencies reported to credit reporting agencies, and foreclosure and other legal proceedings will be suspended.
- For homeowners with non-federally backed loans:
- A mortgage servicer has an obligation to provide, to the best of its knowledge, the name, address, and telephone number of the entity who owns your loan.
- Homeowners whose mortgages are not federally backed should contact their servicer; different servicers have announced different relief options. Federal financial regulators have encouraged financial institutions to work with borrowers who are unable to make payments because of COVID-19.
- If you are renting from an owner who has a federally backed mortgage, the CARES Act provides for a suspension or moratorium on evictions.
- If your landlord has a federally backed mortgage or multi-family mortgage, you cannot be evicted for nonpayment of rent for 120 days beginning on March 27, 2020, the effective date of the CARES Act. After the 120-day period is up, the landlord cannot require you, the tenant, to vacate until providing you with a thirty-day notice to vacate.
Other provisions that may be of help to homeowners:
- The “2020 Recovery Payment” is a provision that could help homeowners pay their mortgage loans. The legislation provides checks of up to $1,200 for single taxpayers, $2,400 for married joint filers, and $500 for each dependent child, with rebates phasing out for higher income taxpayers.
- Similarly, the CARES Act provides for increased unemployment benefits that will provide an additional $600/week payment to each recipient of unemployment insurance for up to four months, as well as an additional 13 weeks of unemployment benefits through Dec. 31, 2020, for those who remain unemployed after state unemployment benefits are no longer available.
- Many homeowners (and millennial homeowners in particular) could also see relief from the provision that suspends payments automatically for federal student loans through Sept. 30, 2020, with no interest accruing or penalties during the period of suspension.
Washington State Department of Financial Institutions
- On March 20, DFI issued guidance for mortgage servicers to assist borrowers: https://dfi.wa.gov/sites/default/files/servicer-guidance-covid-19.pdf
- The guidance requests (but does not require) that Regulated and Exempt Residential Mortgage Loan Servicers support impacted borrowers by:
- Forbearing mortgage payments for 90 days from their due dates;
- Refraining from reporting late payments to credit rating agencies for 90 days;
- Offering mortgagors an additional 90-day grace period to complete trial loan modifications, and ensuring that late payments during the COVID-19 pandemic does not affect their ability to obtain permanent loan modifications;
- Waiving late payment fees and any online payment fees for a period of 90 days;
- Postponing foreclosures for 90 days;
- Ensuring that mortgagors do not experience a disruption of service if the mortgage servicer closes its office, including making available other avenues for mortgagors to continue to manage their accounts and to make inquiries; and
- Proactively reaching out to mortgagors via app announcements, text, email or otherwise to explain the above-listed assistance being offered to mortgagors.
In addition to DFI’s issued guidance, the department has also launched a hotline for homeowners in distress: 1-877-RING-DFI (746-4334) to get assistance on how best to contact their mortgage servicer, and to learn more about their options.
DFI has also created a “Coronavirus Support and Assistance” section for homeowners on their website, with some additional resources and an FAQ, which is available at: https://dfi.wa.gov/homeownership