Covid-19 has impacted housing for everybody, especially people of color. People in the Black community have a saying, “If they catch a cold, we get the damn Flu!” In housing this is seen as the disproportionate inability of households to pay their mortgages, putting their ability to sustain homeownership at risk.
Federal agencies are reporting rising delinquencies across all channels, with particular concentration in Federal Housing Administration (“FHA”) borrowers and borrowers with Veterans’ Administration (“VA”)-backed loans. The 2020 CARES Act forbearance program addressed some of this. January 2021, about 2.7 million households were on a mortgage forbearance, down from a peak of about 4.8 million in May 2020. But now the Mortgage Bankers Association reports that 13.9 percent of borrowers exit forbearance without a plan. Many of those do the cha-cha slide or eat pasteles at Christmas.
So… the National Association of Realtors is getting behind the following strategies for preventing foreclosures and ensuring that your household can access affordable and sustainable mortgage credit. This is what you can do:
● Request increased access to COVID mortgage forbearances through policy changes, including extending forbearance protections for your mortgage;
● Ask your lender about post-forbearance options best suited for your circumstances, and ask for the option of choosing how to resolve your COVID hardships;
● Communicate with your mortgage servicer and find out who has government oversight over servicer execution. Have those folks on speed dial;
● Ask if you are eligible for the Homeowner Assistance Fund which provides funds to borrowers who could benefit from them;
● Ask your lender about alternatives to foreclosure and educate yourself about your options and how to access those programs;
● Contact your consumer credit agency, and ask how they report or record foreclosure avoidance strategies;
● Ask how to access new mortgages after forbearance and foreclosure; and,
● Request Elimination of forbearance penalties that decrease access to credit.
The decade after the great recession in 2008, saw more than five million homes that were originally owner-occupied transitioned to investor-owned rental homes, reducing the number of home sales by about 270,000 each year, or about five percent of typical annual sales during this period. Nearly all of this economic pain had disproportionately affected communities of color. People of color were more likely to experience foreclosure and wealth loss, and the Black homeownership rate has still not returned to pre-crisis levels. That person you voted for is not coming to save you. Let us be proactive this time around to save ourselves. If you need assistance…AskHollingsworth.