What You Need To Know If You Are Struggling With Your Mortgage or Rent Payments due to COVID-19

As we are dealing with these unprecedented and trying times, many people are being faced with great financial uncertainty. In this edition of our guide for consumers struggling financially due the COVID-19 pandemic series, we take a look at what people need to know and be aware of if they are struggling with mortgage or rent payments.

There have been important actions taken in Illinois at the federal level to assist homeowners and renters. On March 20, 2020, Governor J.B. Pritzker issued an executive order suspending evictions from rental units and homes. During this time, a lender and/or a landlord cannot evict a person from his or her  home or apartment.

The federal CARES Act also provides protection for rentals. As stated under the CARES Act, any residential retail property participating in a Federal Assistance Program (e.g., Public Housing, Section 8 Project-Based Rental Assistance, Rural Housing Programs, Housing Choice Vouchers, and/or the Low-Income Housing Tax Credit Program) or that is subject to a Federally Insured Mortgage (e.g., Fannie Mae or Freddie Mac) is subject to a 120-day moratorium on evictions, and/or until July 25, 2020.

Under the CARES Act landlords are prohibited from doing the following:
  • A landlord cannot file an eviction action or nonpayment of rent or other fees and/or charges.
  • A landlord cannot charge penalties and/or fees as they relate to nonpayment of rent.
  • A landlord will be required to submit a notice to vacate no less than 30 days in advance, after the moratorium period ends on July 25.

The Illinois Department of Financial and Professional Regulation (IDFPR) is calling on all lenders and servicers to offer a 90-day forbearance on mortgage payments. The IDFPR also strongly urges that all mortgage servicers and/or lenders grant a 90-day forbearance to qualifying borrowers who are struggling to make payments as a result of the COVID-19 pandemic.

Some modifications and/or forbearance to monthly loan payments may be available for people from their mortgage lender. There are specific rights that have been established by the CARES Act to help borrowers who have certain types of mortgages. The relief a person may be able to receive depends on the type of mortgage he or she has.

Here are the five different types of Mortgages:

Single Family Home Loans Financed by Fannie Mae and Freddie Mac:
Borrowers of single family home loans experiencing hardships, such as a job loss, income reduction, and/or sickness as it relates to the COVID-19 pandemic may be entitled to the following mortgage relief options:

  1. Payment relief through a forbearance plan offering a reduction and/or suspension of mortgage payments for up to 180 days plus an additional extension of up to another 180 days
  2. Relief from late fees, penalties and/or interest (beyond scheduled amounts) during the forbearance plan period
  3. Prohibition against the initiation of any foreclosure process, movement for a foreclosure judgment and/or order of sale, as well as a execution of a foreclosure-related eviction and/ or sale for no less than the 60-day period beginning on March 18, 2020 (expect for vacant and abandoned properties)
  4. Repayment options following forbearance, including either a repayment plan to catch up gradually and/or a permanent loan modification that aims to maintain and/or reduce a person’s monthly payment

Multifamily Home Loans Financed by Fannie Mae and Freddie Mac:
Those people with multifamily home loans have the option of forbearance but only under the condition that borrowers suspend all evictions for renters struggling to pay rent due to the COVID-19 pandemic and do not change any late fees, penalties and/or any other charges to such renters for late payment of rent, in accordance with the CARES Act.

Federal Housing Administration/Department of Housing and Urban Development and Reverse Mortgages for Seniors:
Borrowers of FHA single family loans experiencing a financial hardship related to the COVID-19 pandemic may be entitled to the following Mortgage relief options:

  1. Payment relief through a forbearance plan offering a reduction and/or suspension of mortgage payments for up to 180 days plus an additional extension of up to another 180 days
  2. Relief from late fees, penalties and/or interest (beyond scheduled amounts) during the forbearance plan period
  3. Prohibition against the initiation of any foreclosure process, movement for a foreclosure judgment and/or order of sale, as well as a execution of a foreclosure-related eviction and/ or sale for no less than the 60-day period beginning on March 18, 2020 (expect for vacant and abandoned properties)
  4. Repayment options following forbearance, including a new deferred repayment option for borrowers following a COVID-19 forbearance
  5. Suspended foreclosures and evictions for 60 days as well as a six month extension on due and payable requests for reverse mortgages for seniors

Veterans Administration Loans:
Borrowers of VA loans experiencing a financial hardship related to the COVID-19 pandemic may be entitled to the following Mortgage relief options:

  1. Payment relief through a forbearance plan offering a reduction and/or suspension of mortgage payments for up to 180 days plus an additional extension of up to another 180 days
  2. Relief from late fees, penalties and/or interest (beyond scheduled amounts) during the forbearance plan period
  3. Prohibition against the initiation of any foreclosure process, movement for a foreclosure judgment and/or order of sale as well as a execution of a foreclosure-related eviction and/ or sale for no less than the 60-day period beginning on March 18, 2020 (expect for vacant and abandoned properties)
  4. Repayment options following forbearance

If a veteran has any questions about his or her mortgage options, they should contact the St. Paul VA Regional Office by calling 877.827.3702.

Any Other Type of Mortgage Loan that is Not a Federally Guaranteed Loan:
While the IDFPR is urging all mortgage servicers to defer mortgage payments for 90 days for those who are suffering hardship as a result of the COVID-19 pandemic, borrowers should also be in direct contact with their state bank and/or credit union if that is where their mortgage is held.

For a list of individual modification programs that are available through the bank, visit the American Bankers Association website.

Credit unions are also offering modifications. For a person wanting to see if his or her credit union is participating in said modifications, they can visit the Illinois Credit Union League’s website.

Additional Resources

There are actions you can take as well as places you can call for help with mortgage and/or housing questions. If you are able, you can continue to make your monthly payments. However, if you are struggling to make your monthly payment, you need to make sure to contact your lender and/or mortgage servicer immediately to learn about any payment and/or relief programs.

You can contact the following institutions for additional assistance:

If you believe you are not being treated properly by your mortgage services, you can file a consumer complaint with one and/or all of the following institutions: