One valuable tip for counselors to share with clients opting for a disaster-related mortgage forbearance? Keep a careful log of the people you talk to, say Jen Harris and Patty Brown, trainers for "Foreclosure Intervention Services During Disaster Recovery," a course hosted during the NeighborWorks Virtual Training Institute (Aug. 17-21). The session was one of 57 training courses held during the five-day online event, in addition to workshops, networking events and a symposium on leveling the housing playing field in communities of color.
That was just one of many tips that Harris and Brown provided participants, in addition to advice, recommendations and best practices for working with consumers in their communities.
Counselors should urge clients to keep track of each time they talk with a lender or creditor, Harris says. “Write everything down.” Brown adds that it’s also helpful to tell consumers to keep track of email addresses and phone numbers so it’s easier for clients to remember who they talked to and to follow up down the road. Urge clients to keep a digital record of important communications, the instructors say. A digital photo counts.
Brown and Harris spoke on Tuesday morning, Aug. 18, during a nuts-and-bolts session for housing counselors that highlighted different types of loans and how clients’ ability to pay might be impacted during a disaster, whether that disaster be a hurricane or a pandemic.
“Even through this national pandemic, disasters are all over the place,” says Harris. “We might have clients who are experiencing more than one disaster at a time.”
During a presidentially declared disaster, registering for assistance with the Federal Emergency Management Agency is important. It is important to remind clients to contact their lender, creditor and insurance agency, the instructors say. Also important, especially in a physical disaster like a tornado or flood, is to make sure that residents are reaching out to utility providers. If the property is unsafe, providers can turn off utilities, Harris says. And if a homeowner has to to temporarily live elsewhere, turning off utilities can help them save money that they'll need to rebuild.
The instructors also recommended a crisis budget for clients getting through tough times. A crisis budget is different from a regular budget because “it gets down the brass tacks of it all: What are their absolute needs?” says Harris.
Checking credit scores via the three major credit bureaus is free on a weekly basis through April 2021, Brown says, urging counselors to help clients take advantage of this so they can track their scores. Typically, servicers will suspend reporting delinquencies to consumer reporting agencies for borrowers who are granted disaster-related mortgage relief, Brown says.
Brown and Harris dissected various loans – such as Federal Housing Administration and nonconforming loans – during their session and talked about the nuances of each. They also talked about common misconceptions about forbearances, which vary between people thinking the money is never due to thinking it’s due all at once.
“The biggest thing to tell our clients: Forbearances are not payment forgiveness and they’re not payment holidays. They’re going to have to pay the money back 99% of the time,” Harris says. “This is just a period to give them a breather while they’re going through a terrible situation.”
And they won’t have to pay off everything at once when a forbearance ends, she says. "That’s not the case with a normal disaster hierarchy and it’s not the case now."
08/19/2020
