Attorney General Peterson Recommends Help for Homeowners Affected by COVID-19

LINCOLN – In the wake of the COVID-19 pandemic, Attorney General Doug Peterson and a bipartisan coalition of 34 attorneys general recommended actions to help homeowners in letters sent today to the Federal Housing Finance Administration (FHFA) and the Department of Housing and Urban Development (HUD).

“Nebraska homeowners are facing unprecedented challenges as a result of COVID-19, often through no fault of their own,” Attorney General Peterson said. “I encourage financial institutions and mortgage servicers to help homeowners who cannot meet their obligations because of this pandemic and to provide these homeowners with the relief they need.”

The letters recommend FHFA and HUD:

1. Issue guidance revising their forbearance programs so that forborne (or missed) payments are automatically placed at the end of the loan’s term;
2. Expand eligibility for disaster relief loss mitigation programs; and
3. Clarify that the moratorium on foreclosures and evictions applies to all aspects of the foreclosure or eviction process. That includes issuing pre-foreclosure and acceleration notices, posting or publishing any notices, filing or proceeding with motions beyond continuances, or taking any other foreclosure or eviction action during the moratorium.

The protection of the CARES Act applies only to federally backed mortgages, which make up approximately 62 percent of the mortgage market. Borrowers who are not covered should contact their mortgage servicer (the company to which they send their monthly payment) to determine whether it is offering any relief during the pandemic. 

Are you eligible for relief?

If you have a federally backed mortgage, you have the right to request a forbearance for up to 180 days if you have a financial hardship due to the coronavirus pandemic. You also have the right to request one extension for up to another 180 days. 

To determine whether you are eligible for a forbearance plan or other assistance:

• First find out who services your mortgage and whether you have a federally backed mortgage. Contact your servicer by phone and ask or go to Fannie Mae or Freddie Mac’s look-up tool.
• If you do not have a federally backed mortgage, your servicer or financial institution may be offering other forms of relief to borrowers. Call your servicer and let them know your situation immediately. Ask them what “forbearance” or “hardship” options may be available.

Keep in mind that forbearance doesn’t erase what you owe. You still must repay any missed or reduced payments in the future. 

Trouble getting relief?

Consumers should file a complaint through the Attorney General’s website or send an email to ago.consumer@nebraska.gov if they are struggling to obtain relief from their mortgage servicer.

Attorney General Peterson reminds Nebraskans that he and his staff are diligently monitoring and investigating consumer complaints related to COVID-19. Consumers are encouraged to visit www.protectthegoodlife.nebraska.gov for additional tips for protecting themselves during the COVID-19 crisis.