Mortgage Relief for Residential Homeowners Impacted by COVID-19
By Hoge Fenton | 03.30.2020 | Client Alerts
California Governor Gavin Newsom recently announced far-reaching mortgage relief for residential homeowners impacted by COVID-19 who are struggling to pay their mortgages. In an effort to keep people in their homes and to stabilize California’s residential and commercial real estate markets, private-public partnerships are bringing much-needed assistance to both real estate owners and tenants.
In addition, the Federal Housing Finance Agency announced that Fannie Mae (“Fannie”) and Freddie Mac (“Freddie”) – which together guarantee about $5 trillion in mortgage loans – will offer mortgage forbearance to owners of multifamily properties who suspend tenant evictions.
Mortgage Relief for Residential Homeowners Impacted by COVID-19
Effective March 25, 2020, homeowners who have mortgages with Citigroup, JP Morgan Chase, US Bank, Wells Fargo, and nearly 200 state-chartered banks and credit unions may be eligible for the following relief:
- 90-day Grace Period for All Mortgage Payments: Homeowners impacted by COVID-19 can claim mortgage payment forbearances of up to 90 days that allow homeowners to reduce or delay their monthly mortgage payments. This will be a streamlined process, and it appears likely homeowners will be able extend forbearances beyond 90 days if they continue to experience COVID-related hardships.
- Relief from Fees and Charges for 90 Days: For at least 90 days, financial institutions will waive or refund mortgage-related late fees.
- No New Foreclosures for 60 Days: Financial institutions will not commence any foreclosures or evictions for at least 60 days.
- No Credit Score Changes for Obtaining Relief: Homeowners’ credit scores will not be affected by taking advantage of COVID-19-related relief, late or missed payments.
Mortgage Relief for Commercial Property Owners
This program will widely apply to all Fannie-backed and Freddie-backed mortgages where the owner can show that its tenants cannot afford to make rent payments due to the financial impact of COVID-19.
Governor Newsom’s March 13, 2020 executive order authorized local governments to prohibit residential or commercial evictions due to the nonpayment of rent by tenants impacted by COVID-19. So far, most major California cities have enacted or are in the process of enacting eviction moratoriums, including San Francisco, Oakland, San Jose, and Los Angeles.
The FHA’s forbearance program gives much-needed relief to some commercial property owners (of multifamily properties) who are suddenly barred by the State and/or local jurisdictions from evicting nonpaying tenants.
We anticipate similar new programs and laws will come into effect as COVID-19’s financial impact grows and presents new problems to be solved. Stay tuned.
Hoge Fenton’s COVID-19 Resources website has additional legal information.
If you have any questions about how these programs may impact you, please contact any of us in Hoge Fenton’s Real Estate team, below.
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Shareholder
+1.408.947.2452
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Shareholder
+1.408.947.2404
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Shareholder/Chair
+1.925.460.3362
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Attorney
+1.925.460.3370
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Shareholder
+1.925.460.3365
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This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton
