Coronavirus Money Help: What’s available and where to go

Coronavirus Money Help: What’s available and where to go

Americans are increasingly worried as they face financial hardship amid the closure of nonessential businesses due to the coronavirus emergency. Weeks after many businesses have halted operations to adhere to stay-at-home restrictions financial aid from the Coronavirus Aid, Relief and Economic Security (CARES) Act is weeks away.

U.S. Unemployment Levels Reach Historic Numbers

Consumers are rightly concerned about their financial stability, as the unemployment rate reaches historic numbers and mortgage and rent payments are due. Unemployment figures released this week are staggering. U.S. unemployment is up by 3,000% in just three weeks, and more than 6.6 million applied for unemployment insurance last week, according to the U.S. Department of Labor. The Fed announced coronavirus job losses could total 47 million while the unemployment rate could reach 32%.

Couple figuring out budget on computer coronavirus impact on Americans out of workThe CARES Act has a number of measures aimed at streamlining and supplementing unemployment insurance. First, the plan eliminates the one-week waiting period to qualify for unemployment. Second, the act expands the unemployment benefit period for an additional 13 weeks after the state benefit period runs out and supplements state unemployment payouts with a $600 unemployment bonus per week. Last, the plan includes unemployment eligibility for gig workers, including photographers, DJs, Lyft and Uber drivers, musicians and others who work on a freelance or per-gig basis.

Mortgage Payment Deferral, Rent and Eviction Relief

Many small business owners and workers laid off or furloughed due to COVID-19 are concerned about making rent and mortgage payments that were due the first of the month.

Federally Backed Mortgages

Homeowners with loans owned by Fannie May, Freddie Mac and Federal Home Loan banks may be eligible for delayed payments without late fees, foreclosures or delinquency reports. Loans guaranteed by Fannie and Freddie cover about half of home loans in the United States.

The Federal Housing Finance Agency has announced loan processing flexibility for federally backed mortgage borrowers whose ability to pay their monthly mortgage payment has been impacted. The act allows deferments for up to 180 days and possibly longer.

Privately Held Mortgages

The FDIC is encouraging financial institutions to help meet the needs of those customers and members affected by the coronavirus.

Two of the largest lenders, JPMorgan Chase and Wells Fargo, are working with struggling homeowners affected by the coronavirus COVID-19 emergency. Lenders to date are working with their clients on a case-by-case basis. Late fees and credit reporting would be suspended under the terms, and approval is not guaranteed.

Unlike federally backed loans, most borrowers of privately held mortgages won’t know the terms of repayment until the forbearance ends. Some are offering short-term mortgage payment forbearance of up to 90 days. At least some lenders are requiring missed payments to be repaid July 1 along with the July mortgage payment. Call your bank or lender to discuss your individual needs.

Rent Payments

Several congressmembers and municipalities are recommending legislation that would provide wider protection for people hit by job loss, furlough, loss of hours and sick leave due to COVID-19, including rent freezes. As of now, there is no consistent help waiving rent payments, although some states are considering measures to help both renters and landlords. At least 34 states have issued moratoriums on evictions as well as dozens of mayors and municipalities to ensure renters are not evicted for nonpayment of rent. Nearly half of the nation’s 49 million rental units are owned by individual investors, “mom and pop” landlords who, in many cases, depend on that income to survive, according to the Department of Health & Human Services. It is best to speak to your landlord to make arrangements.

Legislation Proposed to Stem Evictions, Pause Mortgage Payments

Municipalities are considering enacting rent and mortgage payment freezes during the coronavirus emergency to stem a wave of evictions and foreclosures. The Seattle City Council passed a resolution urging state and federal governments to enact mortgage and rent freeze legislation to extend throughout the novel coronavirus pandemic. Pennsylvania legislators are preparing similar legislation, while the Pennsylvania state attorney general has banned evictions during the coronavirus state of emergency.

Democratic Presidential candidates Joe Biden and Bernie Sanders are proposing legislation that would pause mortgage payments, evictions and utility shutoffs, as well as a moratorium on rent payments.

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