For the second month in a row, millions of Americans will be unable to pay their rent or mortgage. Here are a few practical steps to take — whether you rent or own — if you find yourself in that situation.
As BILLSHARK noted last week, the government’s response to the economic side of the coronavirus pandemic has been less than stellar. For the second month in a row, millions of Americans will be unable to pay their rent or mortgage. That’s why we thought we’d offer a few tips on what steps to take if you find yourself in this situation.
1 Renters: Contact Your Landlord in Writing
Everyone knows about the coronavirus pandemic, so the fact that you can’t pay your rent won’t come as a surprise. Your landlord, in turn, may be having trouble making the mortgage payment on their property.
As when you bring a problem to the attention of your boss, don’t just say, “I can’t pay my rent this month.” Instead, propose a series of remedies. Offer to pay a percentage that you can afford (if you can), or detail the steps you’re taking to be able to come up with the money, e.g., filing for unemployment, trying to pick up gig work, trying to get a hardship loan from your retirement account, etc., and some idea of when you might be able to pay.
Be sure to document all contacts, including date and time, and the result of any phone calls or emails. Keep in mind that all you’re achieving is a deferral, not forgiveness of the rent due according to your lease. At some point, you will have to come up with the payments you missed.
Alternatively, you could offer to work it off doing maintenance or other types of work on his properties. Even if you don’t possess handyman skills, ask if he has other needs you might be suited for: cleaning vacant properties, updating the company’s website, gardening, etc.
If your landlord agrees to such an arrangement, be sure to get it in writing: X hours of work = Y dollars in rent forgiveness.
2 Renters: Know Your Rights
The Coronavirus Aid, Relief, and Economic Security (CARES) Act contains a 120-day moratorium on evictions and late fees on properties secured by a government-back mortgage, which covers about half of multifamily housing units in the U.S. Many states and localities have likewise instituted temporary eviction moratoriums.
If you have received an eviction notice, you can take some comfort in the fact that it likely won’t be enforced until the courts—most of which are currently closed—reopen. But don’t count on that situation lasting long. And don’t underestimate some landlords’ inclination to disregard the law.
“We’re seeing illegal lockouts. These are landlords threating to evict the tenants without going through the judicial processes, even after those tenants have explained their COVID-related struggles and an eviction moratorium.”
That’s how Michael Trujillo, housing staff attorney at the Law Foundation of Silicon Valley in San Jose, California, described the problem to CNN. If this should happen to you, get legal help immediately.
3 Homeowners: Ask for Forbearance
Homeowners have more leeway when it comes to missing mortgage payments, simply because the foreclosure process takes much longer than eviction—years, in some cases. But that doesn’t mean you should simply stop paying, because doing so will ruin your credit score, as well as any goodwill you might have received from your lender.
If you can’t pay your mortgage, call or write your lender as soon as possible and ask for a forbearance on you loan — the same persistence that pays off when you learn how to negotiate a bill. This is a process in which the lender agrees to allow you to either pay a reduced amount or skip payments altogether due to a hardship. And, unlike during the Great Recession of 2008, borrowers won’t have to submit loads of supporting documentation.
This does not mean you won’t eventually owe this money. You’ll either have to repay the outstanding amount at the end of the forbearance term (which varies from lender to lender), or you may be able to have it added on to the end of the loan. Lenders are, of course, aware of the coronavirus emergency, and most say they are willing to work with homeowners.
If you have a loan guaranteed by Fannie Mae or Freddie Mac, the government has imposed a temporary nationwide halt to foreclosures on these Federal Housing Administration (FHA) loans, which currently cover over eight million properties. In addition, some states—including New York and California—have imposed a moratorium on foreclosures.
Be aware that lenders are facing the same hardships as other organizations, with reduced staffing often making it difficult to reach someone as millions of homeowners are trying to contact them, so just keep trying.
4 Find Extra Money While You Work Through It
In the meantime, we may be able to find you extra money for rent, mortgage, or other bills as we all struggle through this trying period—trimming your recurring monthly expenses is one of the fastest ways to save money on bills. We’ll review your bills for free, so be sure to contact us and see how much we can save you every month.
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Frequently Asked Questions
What should I do first if I can’t pay my rent?
Contact your landlord in writing as soon as possible. Don’t just say you can’t pay — propose remedies, such as paying a percentage you can afford or explaining the steps you’re taking to come up with the money, along with an idea of when you can pay. Document every contact, including dates, times, and the result of any calls or emails.
Does the CARES Act protect renters from eviction?
The CARES Act contains a 120-day moratorium on evictions and late fees on properties secured by a government-backed mortgage, which covers about half of multifamily housing units in the U.S. Many states and localities have also instituted temporary eviction moratoriums, so check the rules in your area.
What is mortgage forbearance and how do I get it?
Forbearance is a process in which your lender agrees to let you pay a reduced amount or skip payments altogether due to a hardship. If you can’t pay your mortgage, call or write your lender as soon as possible and ask for it. Unlike during the 2008 Great Recession, borrowers won’t have to submit loads of supporting documentation.
Will deferral or forbearance forgive what I owe?
No. A rent deferral is not forgiveness — at some point you will have to come up with the payments you missed. With mortgage forbearance, you’ll either repay the outstanding amount at the end of the forbearance term, which varies by lender, or you may be able to add it to the end of your loan.
Should I just stop paying my mortgage?
No. Even though foreclosure takes much longer than eviction — years, in some cases — simply stopping payments will ruin your credit score and any goodwill you might have received from your lender. Instead, contact your lender right away and ask for a forbearance.
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Can’t Pay Your Rent or Mortgage? Here’s What to Do is a Billshark resource with information and navigation relevant to recurring bills, consumer choices, and savings decisions.
Can't pay your rent or mortgage? Learn how to contact your landlord, claim CARES Act eviction protections, and ask your lender for forbearance.
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For the second month in a row, millions of Americans will be unable to pay their rent or mortgage.
As BILLSHARK noted last week, the government’s response to the economic side of the coronavirus pandemic has been less than stellar.
Everyone knows about the coronavirus pandemic, so the fact that you can’t pay your rent won’t come as a surprise.
As when you bring a problem to the attention of your boss, don’t just say, “I can’t pay my rent this month.”.
Be sure to document all contacts, including date and time, and the result of any phone calls or emails.
Alternatively, you could offer to work it off doing maintenance or other types of work on his properties.
If your landlord agrees to such an arrangement, be sure to get it in writing: X hours of work = Y dollars in rent forgiveness.
The Coronavirus Aid.
The National Consumer Law Center maintains a list of places that have passed bans on evictions.
Check with the Department of Housing and Urban Development for a state-by-state rundown on receiving rental help.
If you have received an eviction notice, you can take some comfort in the fact that it likely won’t be enforced until the courts—most of which are currently closed—reopen.
That’s how Michael Trujillo, housing staff attorney at the Law Foundation of Silicon Valley in San Jose, California, described the problem to CNN.
Homeowners have more leeway when it comes to missing mortgage payments, simply because the foreclosure process takes much longer than eviction—years, in some cases.
If you can’t pay your mortgage.
This does not mean you won’t eventually owe this money.
If you have a loan guaranteed by Fannie Mae or Freddie Mac.
Be aware that lenders are facing the same hardships as other organizations.
In the meantime.
Contact your landlord in writing as soon as possible.
The CARES Act contains a 120-day moratorium on evictions and late fees on properties secured by a government-backed mortgage, which covers about half of multifamily housing units in the U.S.
Forbearance is a process in which your lender agrees to let you pay a reduced amount or skip payments altogether due to a hardship.
No.
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Billshark helps lower internet, wireless, cable, satellite radio, and other monthly bills.
Our experts handle providers for customers and share updates throughout the process.
Customers pay only when Billshark finds savings on eligible bills.
1 Renters: Contact Your Landlord in Writing.
2 Renters: Know Your Rights.
3 Homeowners: Ask for Forbearance.
4 Find Extra Money While You Work Through.
Frequently Asked Questions.
What should I do first if I can’t pay my rent?.
Does the CARES Act protect renters from eviction?.
What is mortgage forbearance and how do I get it?.
Will deferral or forbearance forgive what I owe?.
Should I just stop paying my mortgage?.
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