Know Your Mortgage Options

The COVID-19 pandemic has created a serious challenge for many Minnesota homeowners who are experiencing a loss of income. If you’re among those financially impacted by the pandemic, you might be concerned about how to pay your mortgage.

It’s important that homeowners know all the facts before taking any action related to their homeownership, and Catholic Charities Financial and Housing Counseling program and HUD-certified counselors are available to help navigate the process.

The Minnesota Homeownership Center provides leadership and coordination to the Homeownership Advisors Network, a statewide network of nearly 40 public, private and nonprofit organizations offering free, nonbiased and confidential advising tailored to the specific circumstances of each individual they serve. Catholic Charities Financial and Housing Counseling program is a member of the Homeownership Advisors Network.

According to Julie Gugin, Minnesota Homeownership Center president, mortgage companies are more prepared today to work with homeowners to avoid default than they were during the 2008–2009 foreclosure crisis. “But consumers need to act,” she warns. “Acting early is always important, before you are even thinking about missing a payment. Mortgage relief, or forbearance as it’s often referred to, is not automatic, and it’s not ‘forgiveness’ either.” The Minnesota Homeownership Center recently provided the following guidance on its Welcome Home blog.

The Federal Housing Finance Agency recently announced that all mortgage loans owned by Federal Home Loan Banks (for example, Fannie Mae, Freddie Mac, etc.) will offer temporary relief to those impacted by the coronavirus whose ability to pay their mortgage is impacted. These individuals will be eligible to temporarily delay making their monthly mortgage payments. During this delay there will be no late fees incurred; delinquencies will not be reported to credit bureaus; and foreclosure and other legal proceedings will be suspended.

In addition to the loans covered above, most if not all consumer-facing financial institutions also are offering relief, including mortgage relief where applicable, to consumers affected by the coronavirus. Contact your lender to learn more.

In order to take advantage of any of these relief provisions, consumers must reach out to their lenders to discuss their situation and enroll in these special programs. Missing a mortgage payment without reaching out to your lender will not automatically enroll you. Checking the lender’s website first may be helpful as some have more self-serve functionality available than others.

These temporary relief programs are just that—temporary relief. They should be utilized only when you are at risk of defaulting on your mortgage. Any payments delayed will still need to be made eventually, likely with interest. When speaking with your lender, make sure you understand specifics like this, keeping in mind that additional government relief to consumers as well as to banks may further impact things to the positive down the road.

Protect yourself from scams and scare tactics. Never pay for mortgage relief. Scammers and flippers are working overtime during this period of uncertainty and anxiety. Here’s some helpful information on avoiding scams from the Federal Trade Commission. For trusted information and advice, seek the expertise of a Homeownership Advisor by calling 320-650-1664 to speak with one of Catholic Charities Financial and Housing Counseling program counselors. These services are free and deliverable via phone.

The bottom line for homeowners is that banks are expecting many consumers, through no fault of their own, to understandably have trouble in the short term keeping current on their mortgages. While it is imperative that consumers reach out to their lender and discuss their situation, the banks are poised to assist you during this difficult time.

Approved by the U.S. Department of Housing and Urban Development (HUD), Catholic Charities Financial and Housing Counseling program can help homeowners contact the mortgage company to get back on track if fallen behind on mortgage payments. Our counselors are experts in foreclosure prevention and will work to create an action plan for successful homeownership. Learn more about Catholic Charities Financial and Housing Counseling program at ccstcloud.org/services/financial-counseling or call 320-650-1664 to speak with a counselor today.

About the Minnesota Homeownership Center

The Minnesota Homeownership Center empowers smart homeownership choices through education, research and partnerships grounded in the belief that sustainable homeownership has an essential role to play in fostering diverse, vibrant communities statewide. Learn more at hocmn.org.

About Catholic Charities of the Diocese of St. Cloud

Catholic Charities of the Diocese of St. Cloud is a nonprofit organization that works to build communities, promote family life and enhance human dignity by providing quality services to meet the physical, social, emotional and spiritual needs of individuals and families of all faiths and beliefs. Learn more at ccstcloud.org.