DFI urges consumers to prepare now for end of mortgage and student loan forbearances
OLYMPIA – The Washington State Department of Financial Institutions (DFI) recognizes that additional federal relief, which could be provided to help student loan owners and borrowers, will take time to reach those in need. Knowing this, DFI urges student loan owners and borrowers to take the necessary time now to ensure they understand their payment options when forbearances end.
“Communicating with your loan manager, whether it’s a mortgage loan or a student loan, before your default is over is crucial to avoiding default, damage to your credit and even the worst for homeowners, foreclosure, ”Lucinda, director of DFI’s consumer services division told Fazio.
Mortgage agents continue to process millions of forbearances and under new rules from the Consumer Financial Protection Bureau, as of August 31, 2021, homeowners can continue to request forbearance until the end of the year. If you are unable to resume payments at the end of your forbearance, you can still amend your loan with your mortgage officer, but you should begin these discussions before your forbearance period ends.
“In these difficult times, we want to encourage struggling homeowners to immediately contact them for advice and mediation if needed. In many cases, it can be as simple as calling a housing counselor to discuss options and this service is free, ”said State Representative Tina Orwall, D-Des Moines, who wrote there 10-year-old bill that created the Foreclosure Equity Program (FFP). In the 2021 legislative session, Orwall sponsored the measure to maintain FFP funding and expand its scope to include small homeowners, not just homeowners. “What we’ve learned over the years is that early action produces better results, so I can’t stress enough how important it is for homeowners to call housing advisors before receiving a notice of. seizure or deportation in progress. “
It is important that homeowners and tenants alike be aware of the Governor Inslee Eviction Moratorium “Bridge” (Proclamation 21-09) to help Washington residents get back on their feet financially. The proclamation aims to bridge the operational gap between the moratorium on evictions (which expired at midnight on June 30) and the protections and programs created by SB 5160 that are not yet operational. The ordinance comes into effect on July 1, 2021 and remains in effect until September 30, 2021. According to the governor’s website:
In response to this unintentional deficiency, this ordinance requires, among other things, that:
- Landlords and tenants use the pilot rent assistance and eviction resolution pilot programs in accordance with SB 5160 to resolve any outstanding rent related to COVID (February 29, 2020 to July 31, 2021);
- Tenants take steps to pay rent or avail themselves of rental assistance in order to pay future rent (from August 1, 2021 until the effective dates of this ordinance)
- For any tenant who is or becomes in arrears with payment, landlords offer a reasonable repayment plan to tenants in accordance with SB 5160; and
- Tenants respond to the financing notice and other available programs within the deadlines set by SB 5160.
Questions regarding this order can be directed to the Attorney General’s office.
In addition to the end of housing moratoria, borrowers with federal student loans held by the Department of Education who have been forborne should be aware that current relief flexibilities are expected to end on the 30th. September 2021.
“Washingtonians have many options available to them and many agencies and organizations are ready to help them,” noted DFI Director Charlie Clark. “It is imperative that homeowners, landlords, tenants and student loan borrowers be informed of their eviction and forbearance deadlines, the status of their loans, including upcoming changes in payments, as well as only options available to help them get back on track. Acting now can save a lot of heartache and financial pain down the line. “
According to Federal Student Aid (FSA):
COVID-19 emergency aid flexibilities are available until at least September 30, 2021. Flexibilities include, but are not limited to, the suspension of loan payments, a 0% interest rate, and the cessation of collections on overdue loans.
Here are three steps to make sure you’re ready to resume payments:
- Make sure your contact information is up to date in your profile on your loan officer’s website and in your StudentAid.gov profile.
- Check out FSA’s loan calculator to find a repayment plan that meets your needs and goals, or to decide whether or not to consolidate.
- Consider applying for an Income-Based Repayment Plan (IDR). An IDR plan can make your payments more affordable, depending on your income and the size of your family.
The FSA website goes on to say that those with loans will receive a billing statement or other notice at least 21 days before your loan matures. Don’t wait! Contact your loan manager to find out the payment amount when payments start again. Your payment amount may be different from the amount you paid before the suspension. Make sure you get agreements in writing, read them carefully, and make sure you understand what you’ve agreed to and what your loan officer expects from you after your withholding ends.
If you need help understanding the language used in your mortgage documents or would like to speak to a property advisor, the Washington Homeownership Resource Center has resources to help you do so at http://www.homeownership- wa.org/managing-your -mortgage or by calling 1-877-894-4663.
Homeowners having difficulty reaching their agent should contact the DFI Mortgage Support team at 1-877-RING-DFI (746-4334) or the Washington Homeowner Information Line at 1-877-894 -HOME (4663) to access free foreclosure prevention advice. Additional information is available at COVID-19 Mortgage Relief and Assistance (wa.gov) and in multiple languages at https://dfi.wa.gov/coronavirus/resource-sheets.
The Consumer Financial Protection Bureau (CFPB) has created a video to help homeowners better understand abstentions: https://www.youtube.com/watch?v=M9aRKYvSe-Q&feature=youtu.be. The CFPB website https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/ and the DFI website https://dfi.wa.gov/homeownership/ provide additional information on the options foreclosure prevention available to homeowners. .
If you need help understanding your student loan documents, the Washington Student Achievement Council can help. Visit their site at Student Loan Advocacy | WSAC (wa.gov) or contact their student loan advocate at firstname.lastname@example.org.
The Washington State Department of Commerce has information on housing and rental assistance related to COVID-19 on its COVID-19 Information and Updates site for homeless service recipients – Department of Washington State Commerce. Landlords without rental accommodation should visit the agency’s Landlord Assistance Fund (HAF) page and / or the Foreclosure Equity Program page.