It goes without saying that the pandemic has affected the lives of many massively and will do so for the foreseeable future.
People are struggling financially and have issues managing it. Several organisations are trying to reach and help such people manage their finances better. Coronavirus has dug a deep hole into the pockets of citizens without curtailing any expenses or debt.
Mortgage loan payments have been the biggest challenge homeowners have to face during this pandemic. They can barely arrange their daily expenses with several of them being laid off from their jobs or being paid less salary.
Federal authorities need to take major steps to help people with mortgage loans, student debt, or any debt, in general, to avoid falling into a steep economic slump, which is likely to follow after the coronavirus.
The US government has taken some measures that have helped homeowners manage their home finances. For instance, in March 2020, a stimulus package of $2 Trillion was passed to send direct payments to those eligible as financial aid in exchange for them buying government bonds.
The US government has arranged programs for low-income citizens to help them pay for food, health, health care, and other basic living expenses.
The government is providing rental assistance to people who have lost their jobs because of the coronavirus pandemic if you qualify through eligibility criteria. Federal Eviction Moratorium from the CDC has been extended to January 31, 2021, which might help you to stay in your house if you cannot pay your rent for some more time. If you are facing eviction, you can use the CDC declaration form to communicate your situation to your landlord.
Government programs may help if you have low income and need affordable rental housing. Public housing agencies use federal funds to run housing programs locally, working with building owners to subsidize rent for eligible people.
If you own a single-family home with a federally backed or FHA-insured mortgage and coronavirus pandemic has affected you financially, you can request mortgage forbearance which can provide you temporary relief from mortgage loans.
Homeowners can also opt for Mortgage Refinancing which will allow them to pay off existing mortgages and choose a new mortgage on new terms. This will help you to change your type of mortgage or of lower interest rates or any other support that one needs.
Homeowners who are 62 years old and above are eligible for a reverse mortgage. A reverse mortgage is a home loan that one doesn’t need to pay back as long as you live in the house. You only repay the loan when you die, sell your home, or permanently move away. These mortgages allow older homeowners to convert part of the equity in their homes into cash without having to sell their homes or take on additional monthly bills.
Foreclosure is a situation where the homeowner defaults and is no more in a position to make mortgage payments as required in the contract. This allows the lender to seize the property, evict the homeowner and sell the home, as stipulated in the mortgage contract terms.
To avoid the foreclosure situation:
Homeowners should contact the lender and tell them about their financial difficulties as soon as they are aware that they won't be able to make payments as mentioned in the lending contract. This helps you make them consider creating a plan to accommodate your needs.
Another option would be to take help from the Making Home Affordable(MHA) program which provides free counselors for advice and assistance with keeping homeowners in their house or at least making their getting out safe.
For homeowners who have received forbearance and the period is about to end and are still facing hardship and have a loan covered by the CARES Act, have a right to extend their forbearance period. They can ask for an extension of the forbearance period up to 180 days for a total of 360 days. Another mentionable point is that if they fail to contact their mortgage provider and make a request for extension or payment resumption, they can lose their houses to foreclosure.
There are several such programs that the US government and other organisations are running in order to try and reach people who have had a financial fallout due to the coronavirus pandemic and hold the country to fall into recession.
Lockdown worldwide has doubled the work for homeowners as all members of the family are stuck at home. A most important area that they struggled with is managing finances.
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Ayushi is currently pursuing Chartered Accountancy. No secrets there that she loves to read! She believes words have the power of healing and is a medium that can convey like no other. She hopes to connect with people through her empathy, thoughtfulness, and by adding value to their lives.