Federal relief on the way for homeowners behind on mortgages
Finfer said the money is contained in the $ 1.9 trillion US bailout package passed by Congress and signed by President Biden in March. He said it could help tens of thousands of Massachusetts homeowners affected by the pandemic.
But accessing that money can be confusing, tedious, and time consuming, especially for households already scrambling to make ends meet.
Nonprofit housing groups are starting to train their ground troops on how to reach homeowners in distress and how to guide them through a bureaucratic and technical process.
“The biggest hurdle may be finding the help you need, because these things can be complicated,” said Andrea Bopp Stark, a lawyer with the National Consumer Law Center in Boston.
The worst mistake for anyone struggling to pay their mortgage would be to do nothing, Stark said.
For those in trouble, Stark offers two tips: call your mortgage agent – today, if possible – and enlist the help of a housing advisor trained and certified by the US Department of Housing and Urban Development. The services of HUD’s housing counselors are free to those in need.
Over 40 Housing Counseling Agencies in Massachusetts are listed online.
About 3 million homeowners are currently in arrears on their mortgages, but about 2 million of them are forborne, according to the Consumer Financial Protection Bureau.
Forbearance is the legal term for the suspension of your mortgage payments approved by the lender. It gives homeowners temporary protection against foreclosure, crumbling credit, and late fees while they skip payments.
But tolerance does not last indefinitely. In fact, for the many homeowners who were approved for forbearance last summer, their payment suspension period could end in the next few months.
Missed payments are not canceled, forgiven or erased. They have to be made up one way or another. And it’s up to the owner to negotiate a plan with their mortgage agent.
Yet mortgage agents are on the verge of being inundated with requests for forbearance extensions or approval of repayment plans. That’s why it’s a good idea to call now to strike up a conversation, a conversation that should probably include a discussion of possible help from the Homeowners Assistance Fund.
In addition to HUD’s housing counselors, another important resource is Legal Aid Services, which also provide free help on housing issues. They are online on masslegalhelp.org.
And yet another key resource is the Citizens’ Housing and Planning Association, known as CHAPA and online on chapa.org.
In Massachusetts, more than 20% of homeowners say they have at least moderate doubt about their ability to pay next month’s mortgage, including 2% who say they have no confidence in their ability to pay, according to a Census Bureau survey conducted last month.
This means that over 400,000 households are less than fully confident of paying their mortgage.
Many of these households are in communities of color in places such as Boston, Brockton, Chelsea, Chicopee, Everett, Holyoke, Fall River, Lawrence, Lowell, Malden, New Bedford, Quincy, Springfield, and Worcester.
In a state where only 35% of residents of color own a home, compared to about 70% of white residents, the prospect of a decline in home ownership among communities of color is of particular concern, said Thomas Callahan, executive director of the Massachusetts Affordable Housing Alliance.
“Our mission is to bridge this racial gap in homeownership,” Callahan said.
Rose Webster-Smith is the executive director of Springfield No One Leaves, which was formed in response to widespread foreclosures during the financial crisis that began in 2008. She said the needs in western Massachusetts are acute.
“We had a housing crisis before COVID,” she said. “If we’re not careful, it could explode now. “