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Sunday, April 26, 2020

Delta County Michigan Residents Should Avoid Mortgage Default with 90-Day Mortgage Forbearance

The COVID-19 Crisis caught a lot of people off guard. Americans have not done well saving up money and paying down credit cards. Sometimes when tough times happen the entire system starts to move out of whack and people begin to default on their payments. This can have implications throughout the entire economic chain. Therefore, by putting in place a system that temporarily stops default actions can help shorten the default shock for homeowners and institutions. 

If you have a home and are at risk of defaulting on payment you will want to pay close attention. 

What is the Purpose:
The purpose is to stop the chain of default. When people are not working, using unemployment and not making much money they are not able to scrape together mortgage payments. This shortfall often leads to defaults which in turn causes cash runs and crashes. The defaults are artificially based in the crisis so ensuring people are working and/or temporarily don't have payments will help. A temporary hold/ban will stop further panic that more permanently damage the economy.

What Does It Do?
It provides 90 day forbearance on late mortgage payments, doesn't allow for reporting on your credit report (for a certain time) and temporarily stops foreclosures for 60 days.

Local Participants:
 Delta County has a number of providers that are part of the MiMortgage Relief Partnership Program. A couple of noteworthy credit unions and banks are include:

Delta County Credit Union
First Bank Upper Michigan
mBank
Peninsula Federal Credit Union
and more..... (See LIST). 

What Should You Do If You are Experiencing a Hardship?
Contact your lending institution right away and they will help you. 

Michigan Press Release April 23th, 2020 (Read from website):

Governor Gretchen Whitmer and the Michigan Department of Insurance and Financial Services (DIFS) today announce the creation of the MiMortgage Relief Partnership with over 200 of Michigan’s financial institutions to recognize and expand upon the measures that these institutions have been taking to assist customers to ensure that no one experiencing financial hardship due to COVID-19 will lose their home during this public health crisis.

Michigan’s financial institutions have been working hard to assist their customers during these unprecedented times. This partnership will encourage uniformity in available options for consumers in need of assistance, regardless of financial institution.

“No one should have to worry about losing their home during the COVID-19 pandemic,” said Governor Gretchen Whitmer. “With the MiMortgage Relief Partnership, Michigan’s credit unions, banks, and lenders have stepped to the plate to help our residents who are suffering financial losses due to COVID-19 by providing a 90-day grace period for mortgage payments.”

By signing onto Governor Whitmer’s MiMortgage Relief Partnership, participating financial institutions have agreed that they will continue to work with their impacted residential mortgage loan borrowers in at least the following ways:

Providing affected borrowers with a 90-day grace period for all mortgage payments. Financial institutions will offer mortgage-payment forbearance for 90 days, allowing borrowers to reduce or delay their monthly mortgage payment. In addition, the financial institutions will:

  • Provide a streamlined process for requesting forbearance for COVID-19-related reasons, supported with available documentation; 
  • Confirm approval of and terms of their forbearance program (which should include reasonable solutions for resuming payments at the end of the forbearance term); and 
  • Where appropriate, provide the opportunity for borrowers to extend a forbearance agreement if they continue to experience hardship due to COVID-19. 

Providing relief from mortgage-related late fees and charges for 90 days. For affected borrowers who reach an agreement with their financial institution, financial institutions will waive or refund mortgage-related late fees for at least 90 days.

Foregoing new foreclosures for 60 days. Financial institutions will not initiate any foreclosure sales or evictions for 60 days for affected borrowers who reach an agreement with their financial institution.

Refraining from reporting adverse credit scoring information based upon the borrower’s accessing relief. Financial institutions will not report adverse credit scoring information for affected borrowers who reach an agreement with their financial institution. Financial institutions will report other credit information consistent with Consumer Financial Protection Bureau (CFPB) or other federal agency guidance.

Working with borrowers on their specific needs or concerns. If a financial institution varies from these provisions to the benefit of the borrower or to address specific borrower requests, concerns, or individual financial health, this would be deemed in the spirit of the partnership. In particular, issues surrounding escrow and tax and insurance payments may require more individualized assistance.

As of April 22, 2020, over 200 financial institutions have signed onto the partnership. Participating financial institutions are listed on the MiMortgage Relief Partnership Financial Institutions page.

“The strength of our financial system will be an important factor in how Michigan recovers economically from COVID-19,” DIFS Director Anita G. Fox said. “Through the MiMortgage Relief Partnership, financial institutions will continue to help customers find the solutions that best fit their needs, and to focus relief efforts on those most impacted by the crisis. Michigan residents who can meet their financial obligations can continue to do so, while those who need assistance will be able to work with their financial institutions to access relief.”

Michigan borrowers experiencing a financial hardship due to COVID-19 are encouraged to reach out directly to their financial institution to learn the details of the relief options available to them, and to work out with the institution an agreement applicable to their loan. Borrowers are encouraged to reach out before their loan becomes delinquent. DIFS never advises borrowers to stop paying their loan payments.

Please note that financial institutions and their servicers are experiencing high volumes of inquiries and may recommend using online services when available for the quickest service. Loans held by a financial institution may be serviced by another company.

Lenders who service federally-backed mortgages are subject to federal rules. Borrowers with these loans may wish to visit the CFPB guide to coronavirus mortgage relief options.

For more information on COVID-19 related mortgage relief, see: www.michigan.gov/MiMortgageRelief or call DIFS toll-free at 877-999-6442.

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