This social distancing thing is really interesting. We are seeing how being able to come into close contact with each other allows our economy to operate. It shows us how vital it is be able to come near others—total strangers—in order for business to function.
We are seeing how often you have to be in close proximity with the person you are doing business with in order for that business to merely operate. The business upstairs from mine does massage therapy. They have shut down. My hair stylist just posted on Facebook: “We are about three weeks away from learning everyone’s real hair color.” I want to go pick up my dry cleaning but am not sure they are still open. It’s amazing how this is affecting every part of the economy.
EXCEPT you still have to pay your mortgage. That does not require face-to-face interaction. It just requires you to press a few buttons on a computer or to write a check and seal it in an envelope (without licking it). So you still have to do it.
Despite the fact that you might be losing hours at work, might lose your job, and/or you might have to take time off of work. All of that will affect your income. BUT YOU STILL HAVE TO PAY YOUR MORTGAGE. That obligation doesn’t shut down.
Please hear me: You’re not going to get delays, you’re not going to get help, you’re not going to get bailouts, you’re not going to get any assistance. You need to operate under the assumption that there is no help for you with your mortgage. You must continue to pay your mortgage. Back in 2008 and 2009 when the economy crashed and tons of people lost their jobs, the mortgage companies still expected you to pay your mortgage.
Right now (the week of March 16), the courts are slowing down current foreclosures, but as soon as courts re-open I fully expect things to move forward full steam. Which means anyone who has fallen behind because of the virus now, will be well on the way to foreclosure once things start moving again.
Depending on how long businesses remain closed or on low-volume operation, we may start to see mortgage companies offering forbearance plans or some other minor help. But all the money will still need to be paid at some point. My guess is if they let you stop paying for any amount of time, those missed payments will be divided up and added to your future payments, making future payments higher for a period of time. Prepare for that.
You have a lot of bills to pay: credit cards, the car payment, car insurance, food, utilities– and you have to decide which ones to pay. My recommendation: the mortgage and the car are first. And I know that that might be tough to do and keep up with everything else, but those two bills will be the hardest to catch up with later.
Keep an eye out for any notice you receive about breaks on your mortgage or car payment. There may be some help, just don’t assume there will be help. Don’t go by what your neighbor is telling you or what that friend in Florida is doing—everyone’s situation is different.
I’ve been posting videos every day with updates on the mortgage and foreclosure situation, and suggestions for keeping your budget in check in anticipation of lost earnings.
Stay healthy, everybody, work as much as you can, get paid as much as you can as long as you can, stay away from strangers, and use this time as constructively as possible.
Call or email me with your questions and I’ll set up time to talk with you individually and will share any new information I have on my Facebook page and through videos.