Eviction and Foreclosure Relief Available; Experts Recommend Communicating Needs

Above: East Lansing's Bailey Center, with affordable senior housing, seen from the playground (photo by Gary Caldwell)

A March like no other is coming to end, but April’s start tomorrow means rent is due for many, and mortgage payments are also on the horizon.

Emergency measures have been put in place to protect housing for those who have suffered financially because of the coronavirus pandemic. Housing experts say the most important thing will be for renters and mortgage-holders to communicate with their landlord or lender and negotiate a plan that works for them.

Those struggling with mortgage payments “should definitely communicate with their loan holder as soon as possible,” said LeighAnna Beach, a senior housing counselor for the Capital Area Housing Partnership, a local housing counseling agency that works with the U.S. Department of Housing and Urban Development and the Michigan State Housing Development Authority.

Michigan Democratic Gov. Gretchen Whitmer suspended household and mobile home evictions until at least April 17 for lack of payment. But tenants will still owe their rent.

“None of these eviction moratoriums mean they don’t owe the money,” Beach explains. “It’s a postponement of the eviction or foreclosure action.”

The Michigan Coalition Against Homelessness and 80 allied organizations sent a letter yesterday to Whitmer asking her administration to prioritize homelessness as an urgent area of concern during the state’s response to COIVD-19. The letter notes that people who are homeless are “twice as likely to be hospitalized, two to four times as likely to require critical care, and two to three times as likely to die.”

About 3.3 million people filed for unemployment nationally last week after businesses were shuttered en masse to stop the spread of the COVID-19 virus. That figure does not include the innumerable “gig economy” workers who are considered independent contractors, as well as people who have lost wages because of sickness or quarantine.

Beach said calls to her office had increased 50 percent since February. Her agency offers referrals as well as free-of-charge counseling sessions to distressed renters and homeowners – now over the web or phone, in keeping with social-distancing requirements.

The CARES Act that passed Congress last week and which President Trump signed on Friday suspends for 120 days evictions for tenants in either a federal rental assistance program and for tenants whose landlords have a federally backed mortgage. That takes the deadline to near the end of July.

Both homeowners and landlords who have federally backed mortgages are eligible for forbearance or reduced payments. Beach said landlords will have to pass on savings to their renters if they receive relief from the federal government.

Mortgage companies could increase the monthly payment in a fixed-term mortgage once a forbearance period ends, but half of all U.S. mortgages – those backed by Fannie Mae or Freddie Mac – must give the option of pushing out or extending the life of the loan by a few months so that monthly payments do not go up.

Homeowners facing more dire circumstances, such as the permanent loss of a business, may be able to negotiate more significant changes to their mortgage to avoid foreclosure.

People living in mobile homes may find that they have to remedy their situation by negotiating with two different authorities – both the lot landlord if they pay to rent a space in a mobile home park, and their lender if they owe money on their mobile home.

Additional resources are available to help renters and homeowners at the Michigan Department of Health & Human Services and the Capital Area United Way. The Capital Area Housing Partnership has developed a helpful laundry list of the many bills that area residents may face and how flexible their payment options may be in its COVID-19 Housing Guide.

ELi has a special section dedicated to our reporting on COVID-19 for East Lansing. See it here and sign up for ELi’s mailer to stay informed