The moratorium on foreclosures is set to end soon. How this Bucks County nonprofit can help
With the federal moratorium on foreclosures set to expire this summer, Bucks County homeowners facing difficulties paying their mortgage may be especially concerned.
No need to panic, says Joan Reading, president of the nonprofit Credit Counseling Center headquartered in Richboro, and with offices in Levittown and Doylestown.
“You don’t need to seek legal assistance as we help you through the legal process so you may not lose your home,” she said. The center’s staff will accompany a client to court if need be and the services are free, she stressed.
The CCC has been assisting homeowners to avoid foreclosure long before the COVID crisis hit. The nonprofit firm offers free counseling to homeowners in default on their mortgage payments through the Bucks County Mortgage Foreclosure Diversion Program, which was established in 2009.
In the past year, the CCC has been able to help some county residents get CARES Act grants to pay up late mortgage payments. But so far, only three clients have met the criteria to receive outright grants totaling $43,500, said Jeffrey Fields, director of the Bucks County Housing and Community Development Department.
“If a household was eligible for a partial claim (meaning you can move the amount owed to back of your mortgage) household was not eligible for the assistance because they should pursue that solution,” Fields said. People whose mortgage companies did not allow partial claims have been given grants because they faced “more immediate foreclosure” without the financial assistance, he said. “Others received counseling to assist in their situation, but not financial assistance.”
One Bucks County woman, a divorced mother of two school-aged children, did receive a grant of $10,000 for six months of payments owed on her mortgage after she lost her executive position in the travel industry during the pandemic. She had already been in contact with the CCC to learn budgeting skills following her divorce. She called the nonprofit for advice on how to deal with her mortgage when she lost her job and unemployment covered only one-third of the money she had been making.
“Thankfully, I reached out to them with my budget,” the woman, who asked not to be identified, said. “It was a godsend that I knew of this organization…They sent a check directly to my mortgage company…They were able to help me get current (on mortgage payments),” she said.
She said that when the money came through in December, it made her Christmas. She could enjoy it with her children. And she found part-time work to help her continue to pay her mortgage while she’s actively looking now for a full-time position as travel is resuming.
But the CCC client said that she had to do homework in learning about what federal programs are available to help homeowners in need. “Do your research. There’s help out there but you have to dig around to find it.”
Reading said that when the moratorium on foreclosures expires at the end of July, based on the newest directive from the federal government, “families may be overwhelmed at the prospect of losing their homes and unfortunately for many families their economic conditions may have not improved in the last year to enable them to resume making payments. Our foreclosure prevention program will guide families along the very complex and often stressful foreclosure prevention process.”
According to the Federal Housing Finance Agency, persons who have mortgages backed by Fannie Mae or Freddie Mac and had been given forbearance — permission to delay their full or partial mortgage payments — by Feb. 28, 2021, are eligible for continued forbearance for up to 18 months. Homeowners who filed for forbearance later have up to 12 months.
Fields said most Bucks County homeowners directly affected by the economic downturn caused by the COVID crisis and who needed mortgage relief already have been referred by the county to the CCC for guidance. In most cases, the CCC has submitted its bills for service to the county to recoup costs of the counseling. The county has not given the agency an outright grant, Reading said.
In 2020, the CCC helped 195 clients facing mortgage foreclosure; in 2019, it helped 398, so there were over twice as many people facing mortgage issues even before the pandemic began who sought help compared to last year.
But Reading believes the pandemic shutdowns actually kept people from seeking mortgage counseling. As it eases, more people may use the agency’s services.
Fields said the situation is more dire for renters who can face eviction when the federal moratorium on evictions is lifted. It was supposed to be lifted at the end of this month, but another extension was granted Thursday.
Since the CARES Act funding is expiring this year, any new funding to help homeowners will come from the American Rescue Plan.
Almost $10 billion nationally has been allocated to the Homeowner Assistance Fund, and Pennsylvania is expected to receive $350 million out of this allocation to help those who own their homes avoid foreclosure as well as to pay utility and other housing bills when they are in a financial crisis.
“We have not yet heard how that funding will be distributed,” Fields said.
Reading said that each person’s mortgage situation is based on their finances, which bank or other financial institution they obtained their mortgage from and how long they have to repay it.
While all situations are different, one thing is a priority: Every homeowner who falls behind on their mortgage payments should contact both their lender and the CCC to alert them to their financial difficulties.
The CCC was founded in 1994 to provide counseling “to help people repay their debt, improve their credit scores, revise their budgets, buy their first homes and prevent foreclosure,” its website states. It is funded by the federal Department of Housing and Urban Development, the Pennsylvania Housing Finance Agency and through donations and grants.
“CCC has worked successfully with financial institutions, servicers and borrowers facing default, delinquency and foreclosure for over 10 years,” Reading said. “CCC has documented counseling capacity, outreach capacity, past successful performance and positive outcomes with documented counseling plans which include mortgage foreclosure mitigation counseling, loan workout agreements, and loan modification agreements.”
In many cases, being given forbearance doesn’t mean the borrowers don’t owe the money due on their mortgage, just that they are given more time to work out how they will meet their payments. Reading said the services the CCC provides help clients fully understand what they need to do to save or sell their home without going to foreclosure and to improve or protect their credit rating.
“We have been in foreclosure (situations) for years. There’s a lot of tools in our toolbox,
Reading said. And, she added, people “don’t have to be in a financial pickle” to use the agency’s services to learn how to pay down debt, establish an emergency fund, and save for retirement as well as other financial goals.
The Credit Counseling Center offices are located at 832 Second Street Pike in Richboro, 11 Welden Drive in Doylestown and 208 Levittown Parkway in Levittown and can be reached at 215-348-8003.