Homeowners across the country are struggling to make mortgage payments on time and are experiencing “Housing insecurity”Due to the economic impact of the Coronavirus Pandemic forcing the White House to enact laws aimed at easing the mortgage burden in a crisis where millions of Americans are vulnerable and unemployed.
Last year, Congress did the Cares Act, who offered the first round of major assistance to homeowners unable to make mortgage payments due to lower income or job loss. The package included a year of mortgage aid initiatives by the President Joe Biden extended through its $ 1.9 trillion bailout bill.
The Biden government provided homeowners with $ 10 billion to help with home-related payments such as mortgage, tax, utility, insurance, and homeowners association fees. This was incorporated into the same bill that granted eligible Americans $ 1,400 stimulus payments and the unemployed $ 300 weekly benefits.
Here are the two main forms of homeowner-related help, both of which serve to prevent homeowners from losing their homes due to the pandemic.
Homeowners can sign up for a mortgage forbearance program if they cannot make monthly payments. Forbearance enables homeowners to defer mortgage payments without incurring late fees and other related consequences for late payments.
However, economists suggest that homeowners use this no longer than necessary as they will have to repay the missing payments in the future and will continue to accrue interest during the period.
Those suffering from financial hardships directly or indirectly related to the pandemic can sign up for coronavirus mortgages for indulgence. It is also available to homeowners with government sponsored mortgage loans such as HUD / FHA, VA, USDA. Fannie Mae and Freddie Mac.
Biden’s stimulus package extended the deadline for applying for a leniency program to June 30, 2021 for those who own a HUD / FHA, VA, or USDA mortgage. When homeowners have loans with Fannie Mae or Freddie Mac, there is no deadline.
Most forbearance programs offer three to six months of relief with the option of extending to 12 months or up to 18 months of forbearance.
A foreclosure moratorium prevents the worst consequences for a homeowner with missing payments.
The moratorium prevents lenders from continuing the foreclosure process until June 30, 2021 at the earliest, and gives homeowners in trouble additional time to collectively raise money for payments.
“President Biden is committed to protecting home ownership and housing stability as America begins to turn a painful crisis into a robust recovery,” the White House said in one statement.
When the Biden government enacted homeowner protection legislation, the White House released a fact sheet that found that one in five renter is falling short while more than 10 million homeowners are struggling to make mortgage payments.
“Today’s expanded forbearance and foreclosure programs are an important step in building stronger and fairer communities,” the White House said.
Rachel Bucchino is a reporter for National Interest. Your work was published in The Washington Post, US News & World Report and The hill.