Surviving tough economic times with a roof over your head

Nevada was one of the states hit hardest by the COVID-19 pandemic and resulting economic shutdown. With nearly a quarter of our population suddenly thrust into unemployment, making a mortgage or rent payment got a lot harder for a lot of people in a very short period of time.

Before COVID-19, lenders were reporting a less than 2 percent delinquency rate in Nevada. By April, that number was 7.97, so there’s a good chance some of you reading this have been affected, or you know someone who has.     

The good news is that the 2008 recession provided numerous lessons on how to prevent future foreclosure crises. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), passed by the U.S. Congress, made a number of changes to protect families from eviction and foreclosure. And in Nevada, on March 29, 2020, Governor Steve Sisolak announced a statewide moratorium on evictions as part of the State of Emergency declared in response to COVID-19.  This moratorium is intended to lift in phases; you can find the most recent updates here.

As with everything related to COVID-19, things are constantly changing and there are many details to understand. If you’re a homeowner or renter struggling to make your payments, get advice from a reputable source and then take action. You don’t want to wait on something this important.

A few reputable sources

Here are just a few agencies in the state that can offer advice and/or resources to help you through these challenging times.

  • “HUD-approved Housing Counseling Agencies (HCAs) are a vital resource and there to help,” says Verise Campbell, CEO/COO of Nevada Affordable Housing Assistance Corporation (NAHAC). “HCAs are neutral third parties that can discuss the specific situation and suggest resources for struggling homeowners.” Here’s a list of HUD-approved housing counseling agencies in Nevada, with staff members who can talk with you and offer resources specific to your situation.
  • Community Services of Nevada has a foreclosure intervention program that provides financial counseling and guidance for people who are delinquent or anticipate being delinquent in the near future.
  • Money Management International, a non-profit organization focused on financial education, has a foreclosure prevention program free to any homeowner concerned about their ability to pay their mortgage. 
  • The volunteers at Legal Aid Center of Southern Nevada, Nevada Legal Services and Washoe Legal Services provide free and low-cost legal services for people throughout the state.
  • Your mortgage or rent payment is one aspect of your overall financial situation, albeit a very big part. Volunteer Opportunity Alliance Financial Navigators can meet with you (through phone or video) to talk big picture and advise you on different options and resources to consider for your specific situation, including how to pay your rent or mortgage. 

Do your homework when seeking support

All of the organizations listed above are non-profit and have missions to help their clients through the challenges they’re dealing with. But there are fraudulent companies and people who might offer to “help” you with your foreclosure and end up owning your house. Talk to one of the HUD-approved agencies above to find out if the company you’re talking to is legitimate. And if you feel you’ve been a victim of a foreclosure scam, contact the Mortgage Fraud Unit of the Nevada Attorney General’s office and they can help you understand your options and work through the process.

Mortgage companies want to work with you

Okay, back to the good news. Mortgage companies also learned some hard lessons during the last foreclosure crisis. Campbell says the most important thing for homeowners to know is not to wait to take action.

Campbell has spoken to lender representatives and confirmed they’re readily granting forbearances, which means lenders may allow lower monthly payments or pause monthly paying for a period of time. It is vital to remember deferred monthly payments will eventually need to be made and may be put on the back of the loan with the lenders’ agreement. And it may not be possible to defer taxes and other fees.

“The CARES Act allows lenders to provide mortgage mitigation remedies such as forbearance for up to 180 days,” Campbell says. “If you cannot make your mortgage payment, communicate directly with your lender immediately. Let them know the position you’re in and see if you can work something out with them.”

At this time, because of COVID-19, deferred payments will not be held against you from a credit score perspective, but you do have to work out a plan with your lender.

Related: Here’s the Scoop on Credit Scores

“If you fall behind without working out a plan, it could work against you later,” said Alvin Odom, Senior Manager, Diverse Markets with Charles Schwab. “Mortgage rates are really low right now and you might not be able to take advantage of that if you have a negative mark on your credit.”

If you’re already receiving phone calls from your mortgage company, answer the phone. “Do not ignore those phone calls,” Campbell advises. “You want to engage with your lender now. Don’t be afraid to have those critical conversations.”

Campbell and her team are administering the Unemployment Mortgage Assistance Program, a U.S. Department of the Treasury program designed to deliver help through the Nevada Hardest Hit Fund, to help homeowners who have experienced job loss due to the COVID-19 outbreak.

With a goal of stabilizing neighborhoods and preventing foreclosures, the program offers mortgage payment assistance of up to $3,000 a month for three months (so a maximum of $9,000). In order to qualify, the homeowner had to have lost their job due to COVID-19 and have received their first Nevada State Unemployment Insurance payment. In addition, household income cannot exceed $98,500. For more information, visit nahac.org and call 888-320-6526 to complete an application.

If you’re renting

While the moratorium does mean landlords can’t evict or begin the process of eviction during this State of Emergency, that doesn’t mean renters can ignore their obligations.

If you have lost your job or ability to pay rent because of COVID-19, gather your paperwork and contact your landlord. Let them know as soon as possible so you can work out some kind of payment plan. The moratorium does not forgive any missed rent payments, it just means your landlord has to work with you on setting up a plan.

Options include:

  • Grace period – if you just need a bit of extra time to make the payment, ask for that extra time.
  • Payment plan – it can be extraordinarily difficult to pay back all of your delinquent rent at once, so request a monthly plan that you can afford.
  • Get help – Just like with Nevada’s Hardest Hit Fund, there are organizations that may be able to help you with missed rent payments. Talk to one of the HUD-approved housing organizations to get advice to find out if you might qualify.

This is obviously a very complicated topic, and we don’t have room to get into all the details here, so we’ll just leave you with these two important thoughts: 1) Get advice from a reputable source, and 2) Talk to your landlord or mortgage company as early as possible to work out a plan.

We know it’s not easy, but with the right support you can get through a seemingly overwhelming financial challenge. Don’t be afraid to ask for help.

 

 

 

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