Due to the COVID-19 pandemic and its effects, many homeowners are struggling to afford mortgage payments or may already be in a court foreclosure. Some relief options are available in the forms of temporary payment relief (forbearance), a statewide “pause” on most foreclosure evictions, some extended court deadlines, and electronic filing options.
This article highlights some important parts of these relief options, but does not cover every detail. Please note that mortgage assistance programs may change as the impacts of COVID-19 continue, so information in this article may be outdated by the time of printing. Visit our website for up-to-date information or contact the LSNJLAWSM hotline with questions: 1-888-LSNJ-LAW (1-888-576-5529).
Temporary Payment Relief (Forbearance) for Most Homeowners
Temporary payment relief (also known as “forbearance”) is available to many homeowners facing financial hardship. As explained below, a forbearance may pause payments for anywhere from three to six months, or possibly longer. A forbearance only pauses payments—it does not forgive or cancel them. If you can afford to continue paying your mortgage during this period, you may want to do so in order to avoid a potential foreclosure down the road.
At the end of a forbearance, usually the entire unpaid amount becomes due. If a borrower is unable to pay the lump sum amount when the forbearance ends, then the borrower may apply for other help (known as “loss mitigation”) like a loan modification or a repayment agreement. Keep in mind that there is no guarantee that someone will be approved for a modification or repayment plan. If no agreement can be reached, then the mortgage may go into default status and a foreclosure action could later be filed.
New Jersey Forbearance and Other Mortgage Relief
The New Jersey Department of Banking and Insurance (DOBI) reached agreements with most banking institutions. You must contact your loan servicer to request this relief.
- Borrowers experiencing hardship related to COVID-19 may request a 90-day forbearance from their lender or servicer, and possible additional extensions.
- Late fees and other fees may be waived or refunded.
- Any late or missed payments related to this COVID-19 relief will not be reported to any credit reporting agencies.
If your request for COVID-19 relief is denied, please contact the LSNJLAWSM hotline. You may also file a complaint with DOBI at www.state.nj.us/dobi/consumer.htm or 1-800-446-7467. More information is available at www.state.nj.us/dobi/covid/mortgagerelief.html.
Federal Forbearance and Other Mortgage Relief
CARES Act Forbearance and Foreclosure “pause.” On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which provides relief for “federally backed” mortgages. Generally, these are mortgages that were issued, guaranteed, or insured by the federal government through HUD, the USDA, FHA (including most reverse mortgages), the Veterans Administration, Fannie Mae, or Freddie Mac.
The CARES Act provides forbearance relief of approximately six months, and other assistance options. If you are experiencing financial hardship due to COVID-19, and even if you were already in default before COVID-19, you should qualify for this forbearance relief.
The CARES Act also pauses new and existing foreclosure cases from March 18 until May 17, 2020 (for federally backed mortgages only). If you have a federally backed mortgage and the bank filed a new foreclosure case, requested final judgment, or requested a sheriff’s sale from March 18 to May 17, 2020, please contact the LSNJLAWSM hotline. This pause may be extended past May 17, 2020.
For more information about federal mortgage relief and to find out if your loan is federally backed, visit this website: https://www.consumerfinance.gov/about-us/blog/guide-coronavirus-mortgage-relief-options/.
Additional Relief for a Home Equity Conversion Mortgage (HECM)/Reverse Mortgage. Almost all reverse mortgages are issued through the FHA and insured by HUD, and therefore should qualify for the CARES Act relief listed above.
Additionally, reverse mortgage borrowers can request:
- A six-month forbearance of payment obligations, and possible extensions.
- A six-month delay/extension of any foreclosure and claim deadline, and possible extensions. This extension covers deadlines to apply for and recertify at-risk extensions.
- A waiver of the maximum arrears limit for repayment plan eligibility, thus possibly qualifying you for a repayment plan agreement, if previously denied.
If your request is denied, please contact the LSNJLAWSM hotline or file a complaint with the Consumer Financial Protection Bureau (CFPB) at (855) 411-2372 or https://www.consumerfinance.gov/complaint/.
New Jersey Moratorium (“Pause”) on Foreclosure Evictions
March 19, 2020, Executive Order No. 106 created a statewide pause on most foreclosure evictions until at least two months (60 days) after the COVID-19 public health emergency ends. If you are in foreclosure and you receive an eviction notice during this time, you should call your county sheriff’s department to find out if there is a scheduled eviction date. In some unique situations, an eviction might be allowed during the COVID-19 public health emergency if a judge allows it for a very good reason. Please contact the LSNJLAWSM hotline with any questions.
It is important to remember that eventually the statewide pause will end and evictions will resume. If your home is in foreclosure and you think you may be evicted in the near future, you should use this time to apply for and secure new housing. For help finding affordable housing options in New Jersey, please call 2-1-1 or contact a free HUD certified housing counselor. You can find a list of counselors here: www.nj.gov/dca/hmfa/foreclosure.
New Jersey Extensions of Court Deadlines and Electronic Filing
On April 24, 2020, the New Jersey Supreme Court issued an Omnibus Order that extended certain deadlines for filings and discovery through May 10, 2020. Also, the order stated that the Office of Foreclosure will not review or recommend any motions or judgments received after March 1, 2020 until further notice from the Court.
A new electronic filing system was created for unrepresented people to use for online filing. The system is called Judiciary Electronic Document Submission (JEDS). To learn more about JEDS, including how to create an account and instructions on how to file, please visit: https://njcourts.gov/selfhelp/jeds.html.
In general, court proceedings are being conducted remotely from home, and this may include phone or video hearings. If you have an upcoming court date, but do not have reliable phone or internet access, you should tell the court as soon as possible and request reasonable accommodations. If you encounter any problems, contact your county court ombudsman—a list is available here (https://njcourts.gov/public/ombudsdir.html?lang=eng)—or call 2-1-1.