The city of Lake Elsinore has created a guide to help homeowners navigate the mortgage relief program enacted by Congress as part of the CARES Act in March.
The Coronavirus Aid, Relief, and Economic Security Act, usually referred to by its acronym, was signed into law on March 27 and in addition to $2.2 trillion in stimulus spending the law allows up to one year of forbearance for all federally-backed loans.
City leaders are offering webinars in addition to the information available on the city’s website to walk homeowners through figuring out whether they are eligible for mortgage forbearance, and how to apply for it.
Lake Elsinore City Councilwoman Natasha Johnson announced the tutorial and webinars at the city’s May 12 council meeting.
“Mayor (Brian) Tisdale and I sit on the economic development subcommittee, and we’ve been talking about ways we can help our community bounce back from the effects of covid,” Johnson said at the council meeting.”We know that many of our homeowners that are residents are worried about financial security and protecting their home and being able to pay their mortgage during this difficult time.”
Forbearance means payments are delayed while no additional fees, penalties or additional interest beyond scheduled amounts will be added to the affected account. Homeowners must only be able to claim a pandemic-related financial hardship to qualify, the city says — no other documentation is required.
However, insurance and property taxes must continue to be paid on homes approved for mortgage forbearance, and once mortgage payments resume, they will be slightly higher for the remaining balance of the loan to make up for the forbearance period.
The city says most home loans approved within the last 10 years are government-backed, but there are some loans the CARES Act forbearance will not apply to.
The city lists four examples of federally-backed mortgage programs: Fannie Mae (FNMA), Freddie Mac (FHLMC), FHA (Federal Housing Administration and VA (Veterans Administration).
Some examples of financial hardship include missing work after becoming infected with COVID-19, missing work to care for a family member infected with COVID-19, or being laid off, furloughed or losing hours due to the crisis.
After determining a loan is federally backed and an economic hardship exists, the city advises homeowners to follow these steps:
- Contact your mortgage servicer (those you make your payments to) by phone. Ask them for a COVID-19 Economic Impact Forbearance for six months. (You will be able to extend for additional six months if you are still impacted for a total of one year)
- Ask your mortgage servicer for their business address (this is likely where you send your payments to) Write them a certified letter requesting a forbearance. Remember to keep a copy for your own records!
- If you have an email address for your mortgage company, you should also send an email/copy of your forbearance request letter.
- Follow-up with your mortgage servicer and demand they grant your request your request in writing, whether it be an email or a letter.
The city also says even if a resident’s loan is not federally-backed, they can still call their lender to ask for a forbearance — while the lender can decline, they may be willing to work something out.
The webinars the city is hosting are scheduled for Saturday, May 16 at 10 a.m.; Monday, May 18 at 2:30 p.m.; Wednesday, May 20 at 10 a.m.; and Friday, May 22 at 2:30 p.m. Each of the webinars will be offered for free, but with a limit of 100 people per session. Additional information on the city’s forbearance tutorial and webinars is available here.
Will Fritz can be reached by email at firstname.lastname@example.org.