Katherine Schultz said she and her husband, Danny, never thought they’d fall behind on their mortgage payments.
The couple has mortgages on their Lansing home and another house Katherine lived in before they married five years ago and now rents out.
“We were just kind of cruising along, making our payments and not delinquent on anything,” Schultz said.
Then COVID-19 arrived in Michigan, stay-at-home orders were issued and the Schultzes became unemployed. Danny, who works on the line at Bridgewater Interiors, just went back to his job but worked less than 20 hours last week.
“I’m not sure how much he’s going to get this week,” Katherine Schultz said.
The couple is two months behind on both home loans. Their lenders have deferred payments for three months but this fall the couple will owe more than $10,000.
Katherine Schultz worries they won’t have the cash by then. Money the couple received through the federal government’s stimulus program is paying for groceries and monthly expenses, she said, and
The Schultzes are still trying to convince their mortgage lenders to place their deferred payments at the end of their payment schedule, but neither company has been willing to do it, Katherine Schultz said.
“It’s something that we’re trying to be proactive about,” she said. “We talked with them about putting it at the end of the mortgage, but they said, ‘No. This is what we have.’”
The Schultzes don’t want to lose their homes. Katherine Schultz said she’s certain they aren’t alone in struggling with that possibility.
“I know we’re not,” she said.
Numbers show the need for help from lenders and county treasurers, who collect delinquent property taxes and foreclose on properties after three years of nonpayment.
Since March Michigan State University Federal Credit Union has approved more than 500 deferrals on mortgage loans, said Deidre Davis, chief marketing officer.
MSUFCU has 11,500 mortgage loans, and, prior to COVID-19, typically approved fewer than 20 deferrals each year, she said.
In Ingham and Eaton counties treasurers say more residents who owe delinquent property taxes are reaching out to them during the pandemic to ask for help with avoiding a tax foreclosure in the future.
Here’s a look at the help available for homeowners facing financial hardship during the pandemic.
Lenders are offering help
More than 200 financial institutions have joined MiMortgage Relief Partnership, a state-wide effort announced in April to help mortgage holders facing financial hardship because of coronavirus.
According to the Michigan’s website, through the partnership lenders involved agree to:
► Allow mortgage-payment forbearance for 90 days
► Waive or refund mortgage-related late fees for at least 90 days
► Forego new foreclosures for 60 days
► Refrain from reporting “adverse credit scoring information for borrowers who reach an agreement with their financial institution.”
Denya Macaluso, MSUFCU’s assistant vice president of residential lending, said the institution, which is part of the partnership, has “streamlined” the process for mortgage payment deferrals.
MSUFCU’S Davis said mortgage holders shouldn’t wait to reach out to their lender if they know they can’t make a payment. Connecting early allows the institution to gather all the information staff need to offer options, she said.
“It’s really important to be open, honest and straightforward about what your situation is,” Davis said.
At MSUFCU clients with deferrals have options.
“At the end of the deferment, we offer the option to pay (the) lump sum, but we are not anticipating anyone would be in that position,” Davis said in an email. “So we will take that interest amount and add it to the principal balance, and at the end of the term of the loan, that amount would be due.”
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If you owe delinquent property taxes call your treasurer
County treasurers in Ingham and Eaton counties say while they may foreclose on blighted properties if a home is occupied they don’t intend to foreclose on it this year.
The pandemic is pushing people who were struggling with delinquent property taxes into further hardship, Ingham County Treasurer Eric Shertzing said.
“I’m not taking the roof away from people this year,” he said. “It’s hard for me to imagine. There are just too many human tragedies tied up in that.”
Eaton County Treasurer Bob Robinson said he won’t either, but an uptick in property tax foreclosures over the next three years is “pretty much assured,” he said, because people are bound to get behind on tax payments.
“With just the sheer volume of unemployment claims that have been filed it’s pretty much assured that we’re going to see real activity here,” Robinson said. “People are just losing their incomes and they’re losing their income unexpectedly in many cases.”
That’s impacting people’s budgets, he said, and it creates an inability to delinquent pay taxes.
“Their concerns are more immediate,” Robinson said.
People usually don’t call the county treasurer’s office for help until the last minute, Robinson said, but they shouldn’t wait.
Robinson said he’s worked for nearly eight years to help people understand “that calling their county treasurer is the single most important call they can make if they’re having delinquent tax issues and facing tax foreclosure. We have resources to be able to help these folks.”
Treasurers can defer delinquent tax payments for six months to a year, Robinson said. Of those who get payments deferred more than 90% are able to avoid foreclosure in Eaton County, he said.
Shertzing said resources offered through Capital Area Community Services in Ingham County include access to financial and social services counselors who can help people with repairing credit, budgeting, and managing their debt.
Staff sometimes work with people who reach out to them for one to two years, Shertzing said.
“People don’t get into these situations quickly and they don’t get out of them quickly,” he said. “We’ve got more resources available than most people understand.”
Contact Rachel Greco at email@example.com. Follow her on Twitter @GrecoatLSJ.
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