Can’t pay your mortgage or rent?  What Now?

You can’t pay your mortgage or rent. What now?

Coronavirus is right here in Peabody and the rest of the North Shore, now and for the forseeable future.

Many individuals and families are understandably worried about paying the rent or mortgage.

The global public health crisis is unprecedented. If you don’t already know someone who has been directly impacted by this outbreak, you almost certainly will in the coming weeks and months.

And the economic impact is just beginning to be felt by families and small businesses throughout the North Shore, Massachusetts and the country.

Many people and businesses affected by this catastrophe will ultimately be forced to file bankruptcy.

Many Peabody and North Shore individuals have lost their jobs, or seen their hours reduced.

Many are, or soon will be, forced to prioritize between paying for food, rent, mortgage, and medical expenses. But (some) help is on the way.

The CARES act, enacted into law on March 27, 2020, is a start, and offers some (but not nearly enough) protections to consumers.

The CARES act allows many homeowners with “federally backed mortgage loans” to request mortgage forbearance for up to 6 months. It also prohibits foreclosures for 60 days beginning on March 27, 2020.

Your loan is covered by the CARES Act if it is “Federally Backed” by certain investors including Fannie Mae, Freddie Mac, the FHA, VA and RHS.

You can look up your mortgage by selecting the following links to see if either Fannie Mae or Freddie Mac own your mortgage:

https://ww3.freddiemac.com/loanlookup/

https://www.knowyouroptions.com/loanlookup#

To see if your mortgage is “backed” by another “covered” investor, and for additional links and information, see the National Consumer Law Center’s excellent resource on major consumer protections in response to Covid-19, here.

The CARES Act and state of Massachusetts are also enacting protections for Tenants struggling to make their rent payments in light of the Coronavirus pandemic.

Landlords whose properties are considered “covered dwellings” may not file a court action for eviction or charge additional fees for nonpayment of rent for 120 days from March 27, 2020.

Your apartment is in a “covered dwelling” if the building is secured by a federally backed mortgage loan, or your landlord  or participates in most federal housing programs.

In addition, the Massachusetts Housing Court (where almost all Essex County evictions are filed) has suspended all non-emergency proceedings through at least April 21, 2020. It is expected that date will be extended.

The CARES Act only partially (and unsatisfactorily) addressed the issue of credit reporting in the event you are late on your mortgage or rent payments.

The act provides some protections if you are eligible for and obtain forbearance on your mortgage as provided under the Act.

It is anticipated that Congress will address the issue of credit reporting in future legislation.

Widespread declines in the stock market due to the fallout from Coronavirus has impacted many people’s savings and retirement accounts.

Asset protection planning is more important now than at any time in recent memory. Please call us at (978) 548-5174 if you have any questions about the preservation of your assets from potential claims of creditors.

Before you take a distribution from a qualified plan or IRA, it is a good idea to speak with a qualified financial advisor such as a CPA or financial planner.

If you have questions about your options in managing your debt, dealing with a crisis such as lawsuits or foreclosures, or are interested in learning more about whether bankruptcy is right for you, call us for a free telephone consultation at (978) 548-5174.

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