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Mortgage and Rental Relief in the Face of COVID-19

Help for Renters Asheville CoronavirusA note from Mike Figura, Mosaic Realty Owner and Broker:

As the COVID-19 pandemic continues its spread across the country, many are facing hardships meeting mortgage and rent payments.  The federal government is enacting up to 12 months of mortgage forbearance for borrowers who have Fannie Mae, Freddie Mac, or other government-backed loans, which are the majority of residential loans.  The federal government is also encouraging other mortgage service providers and lenders to implement forbearance programs of their own. 

Landlords whose mortgages are guaranteed by these federal loan agencies can also obtain mortgage forbearance if their tenants cannot pay their rent, giving landlords a chance to help their tenants in the form of rent reduction.  Mosaic Community Lifestyle Realty has worked with Marshall, Roth and Gregory, P.C. to come up with a generic rent modification form to temporarily reduce rent (click here to download form).

FAQs about Mortgage Forbearance

How can I find out who services my loan?

Visit the Making Home Affordable website for links to instantly find out if Freddie Mac or Fannie Mae service your loan. https://www.makinghomeaffordable.gov/get-answers/Pages/get-answers-find-out-mortgage.aspx

What if my loan is not backed by Fannie Mae or Freddie Mac?

If your loan is not backed by Fannie Mae or Freddie Mac, call your mortgage service provider or lender. Their contact information should be on your most recent mortgage statement. Lenders from all sectors, residential and commercial, are currently providing various forms of forbearance.  

What is mortgage forbearance?

A mortgage forbearance agreement is an agreement made between a mortgage lender and a borrower in which the lender agrees not to foreclose, and the borrower agrees to a mortgage plan that differs from the original repayment plan. Forms of forbearance range from a temporary halt in mortgage payments (ex. no payments for 90 days) to loan modifications (ex. interest-only loans, lower interest rates, etc).

What does mortgage forbearance look like?

The steps for applying for mortgage forbearance vary by lender. Borrowers should contact their lenders for specific information. You need to sign paperwork with your lender before you are allowed to stop paying your mortgage. Fannie Mae, Freddie Mac and most lenders are expediting the process and requiring minimal paperwork. 

Does mortgage forbearance impact my credit?

Mortgage forbearance usually has little to no impact on your credit.  

“Generally, forbearance is not likely to have any impact on the credit score,” says Ethan Dornhelm, a FICO senior director of model development. According to the National Association of REALTORS, lenders may (or may not) report to credit companies the existence of a mortgage forbearance, but it definitely does not wreck your credit like being delinquent on a mortgage.

While Mosaic Realty cannot commit to mortgage forbearance not impacting your credit, it is our opinion that in the face of COVID-19, it is unlikely that mortgage forbearance will impact your credit, as under normal circumstances it usually has no impact.

Where do renters fit in?

Renters aren’t directly covered though the Federal Housing Financial Agency (FHFA) plans, although FHFA is offering mortgage relief to the owners of apartment buildings who are struggling when their tenants can’t afford to pay their rent.

At the state level, North Carolina Supreme Court Chief Justice Cheri Beasley has ordered that eviction and foreclosure hearings be postponed 30 days until April 17. 

If you are facing eviction, contact your attorney or Pisgah Legal Services. https://www.pisgahlegal.org/resources-during-the-covid-19-outbreak/

Help available via landlords

Landlords can take advantage of mortgage forbearance programs that are available to them and pass along relief to their tenants.  We encourage landlords to check in with their tenants to see how they are doing and to take advantage of mortgage forbearance programs when needing to reduce their tenant’s rent.  This is especially important in a rent-burdened community like Western North Carolina. Tenants and landlords can elect to use this form, created by Mosaic Community Lifestyle Realty and Marshall, Roth and Gregory, P.C., to help make temporary rental contract adjustments for residential and commercial property. 

Download: Agreement to Amend Residential Rental Contract or Commercial Lease Agreement (“COVID-19 Amendment”) 

Sources and Further Reading: 

https://www.npr.org/2020/03/19/818343720/homeowners-hurt-financially-by-the-coronavirus-may-get-a-mortgage-break  

https://www.realtor.com/advice/finance/how-mortgage-forbearance-can-help-homeowners/

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