NeighborWorks network organizations say they are continuing to hear from residents interested in doing the financial education and credit repair that will help them on a path to buying new homes. But even before March turned to April, housing counselors say they were also receiving calls from residents who were worried about what was going to happen if. If they lost jobs. If they couldn't pay their rent or their mortgage as the COVID-19 virus forced businesses to shut down or scale back.
They'd heard the news — that evictions and foreclosures would be stalled as people were told to shelter in place. But they know that won't last forever. The courts, which haven't been pursuing "nonessential cases," will hear them eventually. And moratoriums on eviction and foreclosure don't mean that the missing payments will be forgiven.
"It's just being pushed off," says Amanda Pascall, housing and foreclosure prevention counselor at HomeOwnership Center at Home HeadQuarters in Syracuse. "If there's a chance to make other adjustments and keep major bills current, do it. Because otherwise, you're just getting into a hole you can't get out of." A budget, she says, is a good first step. It's important to know what's coming in and what's going out at any time, but in hard financial times, budgets become even more crucial.
NeighborWorks network organizations say they have been talking to residents nonstop over the past few weeks.
Pascall says that she still hears from plenty of people working on their financial health and trying to continue on the path to home ownership. At the same "we're getting phone calls from people who are worried."
She encourages them to work with their lenders, she says. "They have to cut expenses, file for unemployment, make sure they're getting access to all of the resources."
Pascall says it can take months or even years to recover from a financial crisis. "The more time passes, the more the numbers don't work," she says. Communicating with lenders, landlords and creditors is key.
Susan M. Reynolds, president and CEO of Community HousingWorks, says her organization owns 42 rental complexes and has six under construction, serving nearly 10,000 residents — the equivalent of two small towns.
"We've already put a process for rent deferment plans in place," she says. "We've started reaching out to our lenders to talk about the income situation for each community."
She says one of the first things they did was communicate with residents to let them know about the eviction moratoriums in their hometowns and the possibility of a rent deferment plan if it was needed. "In ordinary times, we have an effective eviction prevention program," she says. "But we expect to have hundreds and hundreds needing that help so we'll need to scale that up pretty quickly."
Reynolds says the focus will be on helping residents get the benefits they're qualified for, like unemployment, and figuring out who the system missed — "folks who won't qualify for unemployment because not legal or are in process. Or folks who are eligible for their main job but have two side gigs that don't qualify for anything, but it was the side gigs that made it possible for them to live."
She says her organization expects to provide information to the people who can struggle through on their own, and group clinics and individual assistance for the ones who can't. "We have a daily list of people calling in with worries and problems," she says. "We meet every day just to keep track."
Layden Hale, senior counseling advisor at Homeport in Columbus, Ohio, says every day of every week, more residents are finding themselves out of work. "The scary thing for a lot of people is they don't know how long it's going to last, and they don't know where to turn. They don't know what to do first."
Staying calm is key, he says. "Don't panic. It's hard for people who are getting notices every day, but look at how much money is coming in. And then look at the things you have to pay. For a lot of people, either the money has been reduced or stopped all together. They're not going to be able to pay all of those bills."
Like other counselors, he recommends talking to landlords and lenders right away. One of his clients, he says, had come in to talk about foreclosure before COVID-19 spread to Ohio. Her husband had lost a job in November and then she'd lost her own at the beginning of the new year. Even though her problems began before March, he says, the bank put her on a coronavirus forbearance plan.
Hale says there are a lot of unknowns right now. "There's financial uncertainty and health uncertainty. People are worried and they're stressing."
Adds Pascall, "There are lots of ifs that come into it."
Karen Hoskins, vice president of National Homeownership Programs for NeighborWorks America, says there are a lot of scenarios at work. "Certainly, there's huge concern about the possibility of another foreclosure crisis," she says. "But we're also hearing from organizations that while they have those concerns, it's still too early to put program changes in place. We don't know where we're going to be three months or six months from now."
She says there's still a lack of clarity about forbearance programs made available under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and that consumers are having a hard time getting in touch with their lenders to get agreements in place.
"There's a lot of concern and a lot of uncertainty," Hoskins says. "The counseling industry wants to make sure we're being appropriately responsive. Right now, a lot of our organizations are reaching out to customers we've been in touch with in the past and seeing what their status is. They are encouraging them to put a crisis budget in place. A lot of customers can benefit from some financial coaching right now. Even after things normalize, there are going to be financial aftereffects that consumers are going to be challenged with. Mortgage delinquency is predicted to be one of those."
Housing counselors offer these suggestions for network organizations to help residents who find themselves in a state of financial worry.
- "Stay calm," says Hale. "I know that's easier said than done." But when you're calm, he says, you're able to make better decisions.
- "Sit down and do the budget," says Pascall. "Go over all the expenses and eliminate anything that's not necessary. Make cuts wherever you can to keep the lights on and food on the table." And know the difference between needs verses wants, she adds.
- Contact your lender immediately if you think you're going to be in distress and can't make payments, the experts say. The same goes for creditors. And remember that forbearance and relief programs are not automatic, Hoskins says. You have to be enrolled.
- Fired or furloughed? File for unemployment immediately, Pascall says.
- And remember that moratorium and forbearance programs are temporary, Pascall stresses. "It's always preferable to continue paying your creditors and regular household bills If you can make enough spending adjustments."
- For network organizations during these times, remember that "you cannot overcommunicate in times of crisis," says Reynolds of Community HousingWorks. She credits a neighbor with pointing her in that direction. "Staying connected for those of us in this work has lots and lots of layers. Staying connected to each other as staff and board. Staying connected to the people we serve. And staying connected means emotionally connected as well as giving people the information from us, as trusted sources, which is one of our unique roles in our communities."
