Illinois homeowners need mortgage relief

 

ILLINOIS NEEDS UNIFORM MORTGAGE FORBEARANCE

Many longtime Illinois homeowners have lost income during the COVID-19 crisis. They need immediate mortgage relief to keep their homes in this very uncertain time.

The Federal CARES Act requires mortgage forbearance for homeowners with federally-backed mortgages, which represent approximately 70% of borrowers nationally.

 

However, this leaves a significant number of homeowners unprotected. This could result in a wave of foreclosures that will devastate both families and the communities in which they live.

 

Rent relief is also critical to prevent widespread displacement for those affected by COVID-19. Uniform mortgage forbearance is a critical first step in this process. Small landlords and 2-4 unit owner-occupants will default if they cannot collect rent and are ineligible for mortgage relief. Mortgage forbearance will prevent foreclosure and save the essential units of affordable housing that these small landlords provide to renters.

While many states have made wide-reaching agreements with banks to provide uniform relief to all homeowners, Illinois has no such directive in place.

 

To protect vulnerable homeowners, Illinois must take decisive action on this issue. A statewide coalition, including government regulatory agencies and financial institutions, should be established to provide uniform forbearance with the following conditions:

  • Forbearance for 180 days, with the option to extend for an additional 180 days if needed

  • Affordable repayment plan options

  • NO lump sum or balloon repayments at the end of forbearance

  • NO additional interest and late fees during forbearance

  • NO negative reporting to credit agencies during forbearance

  • Banks must reach out to borrowers approximately 30 days before the initial forbearance period ends to discuss repayment options

These terms are modeled after the Federal CARES Act and have been adopted by Fannie Mae, Freddie Mac, and the FHA, among others.

Learn how this proposal protects renters as well as homeowners.

Learn how to talk to your mortgage servicer about forbearance options.

Learn more about the groups supporting this proposal.

Are you a homeowner struggling to pay your mortgage during the stay-at-home order? Learn more about your options.

About Us:

Neighborhood Housing Services of Chicago (NHS) works to promote affordable homeownership opportunities in and around Chicago through affordable lending, housing counseling and homeowner education, redevelopment, and strategic neighborhood engagement.

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Contact: Sarah Brune

773-329-4150

sbrune@nhschicago.org

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