OLYMPIA – The Washington State Department of Financial Institutions (DFI) recognizes that additional government relief that can help homeowners and student loan borrowers take time to get to those who need it. Knowing this, DFI urges homeowners and student loan borrowers to take the time now necessary to ensure they understand their payment options when the forbearances end.
“Communicating with your loan manager, be it a mortgage or student loan, before your grace period ends is critical to avoiding defaults, damage to your credit, and even the worst for homeowners, foreclosure,” DFI Division of Consumer Services Director Lucinda said Fazio.
Mortgage service providers continue to process millions of deferrals and under the new rules of the Consumer Financial Protection Bureau, homeowners can continue to apply for deferrals from August 31, 2021 through the end of the year. If you are unable to resume payments by the time your deferral has expired, you may still be able to make a loan modification with your mortgage administrator, but you should start these discussions before your deferral expires.
“In these challenging times, we would like to encourage homeowners in difficulty to get in touch immediately to seek advice and mediation if necessary. In many cases, it can be so easy to call a housing advisor to discuss options and the service is free, ”said State Representative Tina Orwall, D-Des Moines, who drafted the Foreclosure Fairness Program (FFP) 10 years ago. In the 2021 legislature, Orwall sponsored the measure to maintain funding for the FFP and expand its scope to small landlords, not just homeowners. “What we’ve learned over the years is that acting early leads to better results, so I cannot stress enough the importance of homeowners calling home advisors before receiving notification of an impending foreclosure or eviction.”
It is important for homeowners and renters to also be aware of Governor Inslee’s “Bridge” eviction moratorium (Proclamation 21-09) in order to help Washington residents get back on their feet financially. The proclamation is intended to close the operational gap between the eviction moratorium (which expired at midnight on June 30th) and the safeguards and programs created by SB 5160 that are not yet operational. The order comes into effect on July 1, 2021 and is valid until September 30, 2021. On the governor’s website:
In response to this unintended loophole, this arrangement requires, among other things, that:
- Landlords and tenants use the pilot programs for rental assistance and eviction resolution in accordance with SB 5160 to resolve an overdue rent due to COVID (02/29/2020 to 07/31/2021);
- Renters are taking steps to pay the rent or take rental allowance to pay future rents (as of August 1, 2021 during the period of validity of this arrangement);
- For every tenant who is or will be in arrears, landlords offer tenants an appropriate repayment plan in accordance with SB 5160; and
- Tenants will respond to funding notices and other available programs within the deadlines set by SB 5160.
Questions about this order can be directed to the public prosecutor’s office.
In addition to the expiring housing moratoria, borrowers on federal student loan holdings who have been lenient should be aware that the current relief flexibilities are expected to end on September 30, 2021.
“Washingtoners have many options, and numerous agencies and organizations are ready to help,” noted DFI Director Charlie Clark. “It is imperative that student loan homeowners, landlords, renters and borrowers know their clearance and forbearance periods, the status of their loans, including upcoming payment changes, and the options available to get back on track. Acting now can save you a lot of heartache and financial pain across the board. “
According to Federal Student Aid (FSA):
COVID-19 emergency flexibilities will be available until at least September 30, 2021. The flexibilities include, but are not limited to, the suspension of loan payments, a 0% interest rate, and the suspension of the collection of defaulted loans.
Here are three steps to make sure you are prepared to resume payments:
- Make sure your contact information on your profile on your credit service provider’s website and on your StudentAid.gov profile is up to date.
- Check out the FSA’s loan simulator to find a repayment plan that suits your needs and goals, or to decide whether to go for a consolidation.
- Consider applying for an income-based repayment plan (IDR). An IDR plan can make your payments more affordable depending on your income and family size.
The FSA website further states that those with credit will receive a statement or other notification at least 21 days before your loan payment is due. Do not wait! Contact your credit service provider to find out what the payment amount will be when payments are resumed. Your payment amount may differ from what you paid before the suspension. Make sure you make written agreements, read them carefully, and make sure you understand what you’ve agreed and what your lender expects you to do after your suspension of payments ends.
If you need help understanding the language used in your mortgage documents or want to speak to a homeowner advisor, the Washington Homeownership Resource Center is available at http://www.homeownership-wa.org/managing-your. Resources to help you with mortgage or call 1-877-894-4663.
Homeowners having difficulty contacting their property manager should contact DFI’s Mortgage Assistance Team at 1-877-RING-DFI (746-4334) or the Washington Homeownership Information Hotline at 1-877-894-HOME (4663) for access to free foreclosure prevention advice. For more information, see 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) created a video to help homeowners learn more about indulgences: 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 ways to prevent disease Foreclosures for Homeowners.
If you need help understanding your student loan documents, the Washington Student Achievement Council can help. Visit the website at Student Loan Advocacy | WSAC (wa.gov) or contact your student loan attorney at Loanadvocate@wsac.wa.gov.
The Washington State Department of Commerce provides information about housing and rental assistance related to COVID-19 on its website, COVID-19 Information and Updates for Homeless Service Grantees – Washington State Department of Commerce. Homeowners without rental units should visit the agency’s Homeowner Assistance Fund (HAF) page and / or the Foreclosure Fairness Program page.
source https://collegeeducationnewsllc.com/dfi-urges-consumers-to-prepare-now-for-mortgage-and-student-loan-forbearances-to-end/
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