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Is there help for homeowners? What if I can’t pay my mortgage?

Last Updated: 04/29/2020

On March 19, 2020, Governor Murphy issued Executive Order No. 106, which states that any lessee, tenant, homeowner, or any other person shall not be removed from a residential property as the result of an eviction or foreclosure proceeding.

You cannot be removed from your home during this emergency, even if a final judgment of foreclosure has been entered and a sheriff's sale of your property has taken place.

The eviction moratorium will last until two months after Governor Murphy declares an end to the COVID-19 health crisis, unless the Governor issues another Executive Order to end it sooner.

If you are facing eviction or potential foreclosure, contact a housing counselor immediately by visiting https://njhousing.gov/foreclosure or calling 1-800-NJ-HOUSE.

Mortgage Relief

On March 28, 2020, Governor Murphy announced that financial institutions will provide mortgage forbearance and financial protections for New Jerseyans facing economic hardship as a result of COVID-19.

The initiative has secured support from Citigroup, JPMorgan Chase, U.S. Bank, Wells Fargo, Bank of America, and PNC Bank, in addition to over 150 other federal and state-chartered banks, credit unions, and servicers.

Under the proposal, New Jerseyans who are struggling financially as a result of COVID-19 may be eligible for the following relief upon contacting their financial institution:

90-Day Grace Period for Mortgage Payments: Financial institutions will offer, consistent with applicable guidelines, mortgage payment forbearances of up to 90 days to borrowers economically impacted by COVID-19. In addition, those institutions will:

  • Provide borrowers a streamlined process to request a forbearance for COVID-19-related reasons, supported with available documentation;
  • Confirm approval of and terms of forbearance program; and
  • Provide borrowers the opportunity to request additional relief, as practicable, upon continued showing of hardship due to COVID-19.

The Department of Banking and Insurance has requested that banks add forbearance payments to the end of the life of the loan, rather than requiring a consumer to make a lump sum payment after the 90-day grace period ends. However, specific terms of forbearance plans are set by the investor of your loan.

As of this writing, forbearance programs for loans backed by Fannie Mae, Freddie Mac, and the Federal Housing Administration do not allow for adding forbearance payments to the end of the loan term. Governor Murphy has been advocating for this change with the federal government.

Consumers should contact the institution that services their home loan to understand the specific programs and terms available to them. Following the forbearance period, some institutions may offer borrowers the option of amortizing the payments over a period time or over the entire term of the loan.

No Negative Credit Impacts Resulting from Relief: Financial institutions will not report derogatory tradelines (e.g., late payments) to credit reporting agencies, consistent with applicable guidelines, for borrowers taking advantage of COVID-19-related relief.

Relief from Fees and Charges: For at least 90 days, financial institutions will waive or refund at least the following for customers who have requested assistance:

  • Mortgage-related late fees; and
  • Other fees, including early CD withdrawals (subject to applicable federal regulations).

Homeowners should contact lenders directly to take advantage of this relief. These lenders are experiencing high volumes of inquiries and may recommend using online services when available. Loans held by a financial institution may be serviced by another company.

Note: Most forbearance programs require the institution that services your loan to pay property taxes and insurance during the grace period, even if you do not make a payment. However, consumers will be responsible for making up these property taxes and insurance payments. Consumers should contact the institution that services their loan to determine whether the institution will make the payments initially, or if there are other requirements for making these payments.

If your bank or mortgage service is not cooperative, you can file a complaint online with the Department of Banking and Insurance or by calling (609) 292-7272 or 1-800-446-7467.

To further aid homeowners facing hardship, the New Jersey Housing and Mortgage Finance Agency offers homeowners free counseling through its Foreclosure Mediation Assistance Program (FMAP). Counseling is free, available now, and can be provided remotely. Counselors will provide assistance to help homeowners avoid potential foreclosure.

For a list of housing counselors participating in FMAP, visit: https://njhousing.gov/foreclosure

For more information on COVID19-related mortgage relief and answers to frequently asked questions, please visit: https://www.state.nj.us/dobi/covid/mortgagerelief.html

Source: Executive Order No. 106; https://www.state.nj.us/dobi/covid/mortgagerelief.html; https://www.state.nj.us/dobi/consumer.htm