Homeowner & Tenant Rights

Thanks to the National Association of Consumer Advocates for this informative content.

Mortgage delinquencies hit a five-year high in May as COVID-19 battered the economy and household finances. With record numbers of Americans out of work, many are concerned about being able to keep up with payments on their homes.

State and federal governments quickly enacted protections to help millions remain in their homes during the pandemic. But as infections continue to surge and the economy remains sluggish, families are struggling to afford to stay in their homes. There are options to help consumers get through this unpredictable and difficult period.

• All about forbearance – Forbearance is when a mortgage servicer or lender allows a homeowner to pause or reduce their payments for a limited time. “If your mortgage is currently in forbearance, and that forbearance is coming to an end, reach out to your servicer at least thirty days before the forbearance will end to make repayment arrangements,” said Judith Fox, Clinical Professor of Law at Notre Dame Law School. “Many servicers only granted homeowners 90 days of forbearance. However, the CARES Act provides for 180 days and an additional 180 days, for a total of one year of forbearance,” Fox said. “Do not wait until you have missed a payment. If you are in forbearance, but cannot resume making payments, request an extension.”

While the moratorium on foreclosures may be expiring, consumers are still eligible for up to one year of forbearance, followed by a loan modification.

Homeowners whose mortgages are not federally-backed may be granted forbearance and other assistance from their loan servicers. Be aware, these programs may come with additional fees or other charges. Borrowers should ask their servicers about these details.

• Keep an eye out for errors – Borrowers who receive an accommodation from their mortgage servicer should continue to monitor their monthly statements and their credit reports to ensure information about their accounts are accurate. Equifax, Experian, and Transunion are offering free weekly credit reports to all consumers through April 21, 2021.

• Make payments when possible – Forbearance allows homeowners to temporarily skip some payments now. However, homeowners will still need to make up for the mixed payments. Those who can afford to pay their mortgage should continue to do so to avoid having to potentially pay more later on.

• Watch out for scam artists – Homeowners should be wary of companies claiming they to offer mortgage assistance, especially those requiring upfront fees. It is illegal for these companies to take payments before producing results the homeowner is satisfied with. The Federal Trade Commission has more information on how to spot mortgage scams and what rights homeowners have.

• Consult with a housing counselor – A non-profit housing counselor sponsored by the Department of Housing and Urban Development can help worried homeowners figure out their best option. This service is low-cost and often free.

• File a complaint – “If you are unable to reach your mortgage loan servicer, file a complaint with the online Consumer Financial Protection Bureau complaint (database),” said Prof. Judith Fox. When the CFPB receives a complaint from a consumer, it sends the complaint to the complained-about company which is then urged to respond to the consumer and the CFPB within a reasonable time.

• Seek legal assistance – But first: “Keep your documents and keep your notes from all your interactions with your mortgage company. It will help you keep track of what’s happening, and help your lawyer help you if something goes wrong,” said Jeff Gentes, an attorney at Connecticut Fair Housing Center.

If a homeowner’s mortgage servicer refuses to comply with the CARES Act or other applicable laws, it may be time to get legal representation.

Consumers Ascending thanks Professor Judith Fox of Notre Dame Law School and Jeff Gentes of the Connecticut Fair Housing Center for their help with assembling these tips and resources.

Bardo Law, P.C. is a proud member of the National Association of Consumer Advocates.
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National Association of Consumer Advocates
1215 17th Street NW, 5th Floor, Washington, DC 20036
Phone: 202.452.1989 | Fax: 202.452.0099

Chicago Volunteer Legal Services (“CVLS”) just announced its launch of a COVID-19 mortgage relief program. Right now, the CARES Act allows struggling homeowners with federally-backed mortgages to seek mortgage relief. Payments may be paused for between six months and one year and once payments resume, homeowners may qualify for loan modifications or other payment options.

Homeowners must request assistance and they have a limited time to do so. Therefore, CVLS created a toolkit to help these homeowners determine if they qualify and complete the process.

Check out more details at the CVLS website https://www.cvls.org/get-legal-help/covid-19-relief/.

We are proud to spread the word about CVLS’s new program. Bardo Law, P.C. has successfully obtained results for homeowners subject to unfair mortgage servicing practices and remains here to help.

Home repair fraud lawsuits are often hard to file because the contractor has skipped town.  So what do you do to minimize your chances of falling victim to a home repair scam in the first place?

• Beware of any contractor that comes to your home unannounced and promises home repair work in a very short time and at a low cost.  If it sounds too good to be true, it usually is.
• Before signing any home repair contract, do an online search for any complaints against the contractor.  It’s also a good idea to check the Circuit Court of Cook County website to make sure other homeowners haven’t sued that contractor or the company.
• Be cautious about paying cash.  If the contractor skips town and the work isn’t done, your money is likely gone for good. However, if you pay by credit card, you may be able to dispute the charge with your credit card company.  Check your credit card’s terms and conditions to see how long you have to dispute a charge and follow the instructions for disputing that charge in writing.
• Do not pay on any home repair or remodeling contract over $1,000 unless the contractor gives you a copy of the “Home Repair: Know Your Consumer Rights” pamphlet.  This pamphlet will explain what every home repair contract must include, namely: (1) the contractor’s full name, address, and telephone number; (2) a description of the work to be performed; (3) starting and estimated completion dates; (4) the total cost of work to be performed; (5) the schedule and method of payment, including down payment, subsequent payments, and final payment; and (6) a provision stating the grounds for termination of the contract by either party.

What are other telltale signs of possible home repair fraud?  A contractor who changes payment terms during the project, demanding “progress” payments that were not originally agreed to.  This can mean the contractor is short on cash and is using your money to pay for materials needed on another project. Also, if you pay for materials, make sure the contractor gives you a release of lien showing the subcontractor or store was paid.  Don’t be stuck paying the contractor for materials that he doesn’t pay for.

Home repair and remodeling projects can be so rewarding if done by the right team of contractors. Make sure to do your homework and don’t be pressured into a job if you have any doubts.

The Department of Justice’s U.S. Trustee Program reached a national settlement with Wells Fargo over mortgage servicing complaints.  Announced yesterday, Wells Fargo will pay $81.6 million for its repeated failure to provide homeowners in bankruptcy with required payment change notices.  Even though Bankruptcy Rules require mortgage creditors to file and serve a notice before adjusting a Chapter 13 debtor’s monthly mortgage payment, Wells Fargo admits it failed to do so, impacting nearly 68,000 mortgage accounts.  Details of the settlement are available at http://www.justice.gov/opa/pr/us-trustee-program-reaches-816-million-settlement-wells-fargo-bank-na-protect-homeowners.

Homeowners will receive credits on their mortgage accounts, depending upon the mortgage balance, with an average result of $1,254 per homeowner.

Director Cliff White of the U.S. Trustee Program stated:

I am pleased that Wells Fargo has acted responsibly by accepting accountability for its deficient bankruptcy practices, agreed to compensate affected homeowners for those deficiencies and committed to making necessary improvements in its bankruptcy operations…When creditors fail to comply with the bankruptcy laws and rules, they compromise the integrity of the bankruptcy system and must be held accountable.  Transparency in the process is of paramount importance.  Homeowners in bankruptcy have the right to proper and timely notices, particularly when they are being asked to pay more.  The U.S. Trustee Program remains diligent in its effort to hold financial institutions that disregard the law accountable for their actions.

For years, consumer advocates have pushed for new, easier to understand disclosures. When you buy a home, the paperwork is overwhelming and, let’s be honest, almost impossible to understand. When you’re presented with papers at a real estate closing, there is never sufficient time to read, review, and process the mountain of documents you’re being asked to sign. The Consumer Financial Protection Bureau understood this problem and has announced new guidelines. Visit http://www.consumerfinance.gov/know-before-you-owe/

“The CFPB’s mortgage initiative is designed to help consumers understand their loan options, shop for the mortgage that’s best for them, and avoid costly surprises at the closing table.”

“Consumers will face less stress when applying for most mortgages after October 3, when our new disclosure rule takes effect. The new rule and disclosures ease the process of taking out a mortgage, help you save money, and ensure you know before you owe.”