Right now, there is a global pandemic gripping the world. Everyone is being asked to self-quarantine and social distance in order to stop the spread of the CoronaVirus (COVID-19). Businesses are laying off mass number of employees. The amount of work shifts employees are working are being reduced. Retail, service and restaurant workers are being hit the hardest due to restrictions on how many people can gather in public are being enforced. Unemployment claims are being filed at their highest levels in the U.S. in years. With this comes a natural concern for the future. What will my life be like? How will I pay my bills? Will I lose my house? My car? My business?
Over the coming days and weeks, there will be numerous new reports and countless social media posts and videos about what the government will be doing to help keep the economy and Americans afloat during this pandemic and the aftermath of it. It is very important that you check all of your information sources as sadly, there are too many people spreading rumors and misinformation right now and more than ever.
It is my goal to provide as much verifiable information as possible and my thoughts on what it means to you as the pandemic continues.
For those that have lost their jobs during the pandemic, the state of California has waived its one-week waiting period to collect unemployment benefits. Normally, you would have to be unemployed seven days before you could claim unemployment benefits. Now you can do it immediately. Although there is a wait to get the first check, the claim can be processed immediately, and the first check will provide some financial relief.
The governor of New York has announced that he has announced a moratorium and freeze on foreclosures and mortgage payments. This will apply to those who are working part-time or unemployed. There will also be no negative credit reporting for these payments and there will be no late or online payment fees during this period. The important thing to remember is that during the 90-day freeze on mortgage payments, the payments will not be waived but the payments will be put on the back end of the mortgage. While this will provide some temporary relief, there will be a high long- term borrowers of this move. I will cover these costs in a future blog.
New York’s actions followed the federal government’s decision, announced by the Department of Housing and Urban Development to suspend all of its evictions and foreclosures through April. This moratorium also applies to mortgages insured by the Federal Housing Administration, affecting about 8.1 million households. Multifamily housing that is financed by Freddie Mac and Fannie Mae are not covered by this action.
Ultimately, the goal is to avoid putting pressure on the landlords and banks to foreclose on and evict those who can’t pay their mortgage or rent as a result of the CoronaVirus pandemic.
While the news is slow to develop regarding finance in the post-pandemic world, the key is not to panic and to stay safe. There will be more options available to those struggling as the days go on.
