The Challenges Homeowners are Facing
A recent survey of 60 NeighborWorks Western Pennsylvania (NWWPA) customers who purchased a home within the last 6 months found that 25 percent had been affected financially by the COVID-19 pandemic, whether it was job loss, furlough, or reduced pay. Unfortunately, they are not alone, as nearly 1.8 million Pennsylvanians have filed for unemployment since mid-March.
Governor Wolf issued an executive order that protects Pennsylvanians during these challenging times by delaying foreclosures and evictions from taking place until July 10. At the federal level, the Coronavirus Aid, Relief, and Economic Security (CARES) Act provides mortgage relief for homeowners.
One consumer protection in the CARES Act is a forbearance period for homeowners with home loans backed by the federal government (e.g., Fannie Mae, FHA, VA, etc.). Homeowners affected by COVID-19 can request that their lender temporarily pause mortgage payments for up to 180 days. They can apply for an extension of another 180 days if needed. Homeowners are still responsible for those missed payments, and must arrange with their lender how they will be repaid.
8 percent of all U.S. homeowners are now in forbearance, according to the Mortgage Bankers Association.
More homeowners are taking advantage of low interest rates to refinance mortgage loans to reduce their payments. There has been a 200 percent increase in refinancing activity compared to last year. But in this economic environment, lending requirements, both for refinancing and new mortgage loans, are more stringent.
Wherever our neighbors are on the homeownership spectrum, from simply reviewing their income and expenses so they can re-work their budget to helping them navigate conversations with their lender to better understand foreclosure prevention options, we’re ready to help.