I just left a message for a client, who hasn’t been in good touch with me all summer, urging her to reach back out to me to continue working on her mortgage modification application. I reminded her that, in her specific case, it is a miracle she’s still in her home, and that it’s a miracle that because of Covid, foreclosures have been delayed, giving her more time to work on saving her home.
I didn’t mean to imply there is anything good about Covid, I hope that doesn’t come across as flip, especially to anyone who has lost friends, family members or co-workers to the disease, or who is suffering with it or its aftereffects.
However, Covid has revealed a dirty reality that the government and society does not want to talk about: we all need a place to live and we all need to PAY for a place to live. And those who cannot pay for a place to live become homeless. We all agree there are enough (too many) people who are homeless. The homeless are often viewed as causing that problem themselves, either by becoming drug or alcohol addicted and unable to pay for housing, or not managing mental illness and not being able to pay for housing, or both. We can stomach blaming those who we see as “bringing it on themselves,” especially when the root cause is some kind of human weakness and inability or unwillingness to “straighten up” and function.
Covid has been a big test as to whether we will tolerate blaming people for financial problems when there is a strong argument that financial problems are due to something out of their control, like all the shutdowns.
Covid has shown revealed how closely many families—middle class, working families—are to being unable to pay for a place to live. Just a week or two after the government required many industries to shut down and layoffs occurred, banks and mortgage companies started to see how quickly millions of their mortgage customers were going to be unable to pay their monthly mortgage payments. That would lead to a wave of foreclosure unless something was done to intervene. Our government could not realistically blame these homeowners for inability to pay for their housing (like they can an alcohol-addicted homeless person), since they clearly did not “bring it on themselves.” So the government helped.
A huge benefit of Covid (sorry to use a positive word with such a negative one there) is that long-term delays have been put in place for homeowners with mortgage payments. If you have a certain type of loan you can request up to 12 months of forbearance of your payment (with even better protections if you were not already behind when the Covid shutdown started), and most other lenders are following that example also. All a homeowner generally needs to do is state their income has been negatively affected by Covid to get assistance in the form of a delay on the obligation to make payments. That is a miracle, in the post-2008 era of getting no help with your mortgage during times of hardship unless you go through an exhausting modification application process.
Our courts, too, are providing delays. There has been virtually no activity in any foreclosure matter since the end of March, 2020. I have made an entire career of helping homeowners and others with unpaid or overdue debts obtain delay of court proceedings against them, to provide them time to save money or apply for assistance with those balances. And in one fell swoop the Connecticut courts shut down, and have only slowly begun to reopen. The foreclosure docket seems to be the last to see any action. An uncharacteristic miracle in times of the unforgiving “bootstrap” attitude toward the middle class.
If homeowners don’t take advantage of this slow-down and shutdown, and this unprecedented assistance for the middle class, they are just no paying attention. This will never happen again. Remember the big bail-outs the banks got in 2008 and 2009 when the real estate bubble burst? Well, this is OUR bailout—this is the one time homeowners will get to not have to pay their mortgages. This is the one time the government is recognizing that the middle class needs help. It’s the one time you get to save up your payments, or as much of your payments as you can. It may not look like it, but this is your bailout. Probably your one and only one too, in this lifetime.
The banks, courts and government are starting to get impatient—they are going to reopen before we are all ready, before we are will be capable of making regular monthly payments again but likely after the forbearance periods have run out. That old blame game that is so characteristic of a capitalist economy—that it’s up to you to pull yourself up by your own bootstraps—is still there, lurking beneath the surface, waiting for the moment things reopen before you are ready.
If you like to live in a world where the large institutions who have so much control over us, our happiness and our very basic survival needs like housing, help us, recognize our problems, and come up with creative and truly helpful programs to see us through, then say something. Let your representatives to Congress know—thank them. Tell your story. Encourage them to keep their eyes on us down here in the middle class. If that’s not your thing, then at least take advantage of this opportunity and save as much money as possible. Regroup financially- start using a budget, stop spending money on unnecessary things, start looking at retirement and beef up those savings. Because help and time are running out. If there’s a second wave, or another pandemic, I don’t think the help will come again.
If you are the client I just left that message for and you are reading this, Call me! You are running out of time. But I am still here to help.