COVID-19 Mortgage Relief Options for Homeowners

On July 2, 2020 The Minnesota Attorney General Keith Ellison, Governor Tim Walz, and Lieutenant Governor Peggy Flanagan announced a commitment by more than 30 financial institutions to provide mortgage relief options to customers facing financial hardship caused by COVID-19 for homeowners not covered by the CARES Act.

Under this framework, participating financial institutions have agreed to offer the following relief options:

• 90-day forbearance period for customers facing financial hardship caused by COVID-19
  Participating financial institutions will offer mortgage-payment forbearances of up to 90 days to single or multi-family mortgage customers directly impacted by COVID-19.  Qualifying customers can begin applying for forbearance on July 1, 2020. 
• Customers accessing forbearance will not be required to make a lump sum payment at the end of forbearance plan
  Participating financial institutions will not require single family customers who qualify for forbearance under this framework to make a lump sum payment at the end of the forbearance plan. Instead these institutions will work with borrowers on repayment options, which may include:
  • Allowing customers to add the reduced or missed payments over the lifetime of their loans; or
  • Extending the maturity of the loan to make up for the missed payments.
• No late fees or negative credit reporting for customers in a forbearance plan
  For single family customers who are in an active forbearance plan under this framework, the participating financial institutions will:
  • Freeze all mortgage-related late fees for missed payments; and
  • Not report late or missed payments with credit reporting agencies

The following financial institutions have agreed to offer the mortgage relief options provided by this framework:

• Accentra Credit Union
• Affinity Plus Federal Credit Union
• Anoka Hennepin Credit union
• Bremer Bank
• Central Minnesota Credit Union
• City & County Credit Union
• Dawson Co-op Credit Union
• Embarrass Vermillion Federal Credit Union
• Financial One Credit Union
• First Alliance Credit Union
• First Security Bank
• Foresight Bank
• HBI Employees Credit Union
• Heartland Credit Union
• Mayo Employees Federal Credit Union
• Members Cooperative Credit Union
• MidMinnesota Federal Credit Union
• Minnco Credit Union
• Minnesota Power Employees Credit Union 
• Minnesota Valley Federal Credit Union
• MN Catholic Credit Union
• Mower County Employees Credit Union
• North Memorial Federal Credit Union
• NorthRidge Community Credit Union
• Riverview Credit Union
• South Metro Credit Union
• SouthPoint Financial Credit Union
• TopLine Federal Credit Union
• Two Harbors Federal Credit Union
• US Bank
• Virginia Co-op Credit Union
• Wakota Federal Credit Union
• Wings Financial Credit Union

FAQ on Minnesota’s Mortgage Relief Framework with Financial Institutions

How do I apply for forbearance offered by this framework?
You should first ensure that the financial institution servicing your mortgage is participating in this commitment. You can find your servicer’s name on your mortgage statements or by searching the Mortgage Electronic Registration Systems (MERS).
If your mortgage servicer is participating in this framework, you should contact and work with them directly to apply for relief offered under this framework.

How long will the forbearance last?
Participating financial institutions will offer forbearance up to 90-days. Qualifying customers can apply for forbearance under this framework, starting on July 1, 2020 and ending on October 1, 2020.

How long will the freeze on mortgage-related late fees last?
For as long as you are in forbearance under this framework, the participating institutions will not charge you late fees for missed payments.

How long will the no negative credit reporting last?
For as long as you are in forbearance under this framework, the participating institutions will not report late or missed payments with credit reporting agencies for skipped payments.

Please be aware that financial institutions may report a forbearance, which will not impact your FICO score but may impact credit scores furnished by other credit score providers. It may also impact your ability to borrow in the future. Contact your mortgage servicer directly to see if they will report the forbearance to credit agencies.

Do I have to repay the monthly mortgage payments that are suspended or reduced under this framework?
Yes. If you choose to take advantage of the forbearance plan offered in this framework, you are still responsible for repaying the mortgage payments or the balance of reduce mortgage payments that you missed.
However, participating financial institutions will work with you to explore repayment options. You will not be required to make a lump sum payment of the payments you missed or reduced under this framework. You will have other options for repayment, which may include:

• Adding  the reduced or missed payments over the lifetime of your mortgage, which usually leads to higher monthly mortgage payments; or
• Extending the maturity of your mortgage to make up for the missed payments

We recommend you discuss which repayment options best fits your needs when first applying for forbearance. Contact your mortgage servicer to discuss your options.

What if forbearance is not the best option for me?
If the forbearance relief offered under this framework is not the best option for you, we encourage you to contact your lender to explore other relief options. Depending on your lending institution, they may be able to offer you other forms of relief, including:

• Only making monthly interest payments on your mortgage
• Interest rate reduction on your mortgage
• Extending the term of your loan to reduce payments
• Refinancing your loan into a Fannie Mae loan

What if my financial institution/mortgage servicer didn’t join this framework?
The Minnesota Attorney General’s office, the Governor’s office, the Minnesota Department of Commerce, and Minnesota Housing have also had productive conversations with other banks including independent community banks about what options may be available to their borrowers.  Many of these entities are interested in working 1-on-1 with their borrowers on a range of options for assistance, and encourage borrowers impacted by COVID-19 to reach out.
If your financial institution is not currently participating in this framework, we strongly encourage you to contact them to request relief.

What If I continue facing financial hardship due to COVID-19 after October 1, 2020?
If you continue having trouble making your mortgage payments due to COVID-19 after the October 1, 2020, contact your lender as early as possible.

What if I need assistance requesting relief?
The Minnesota Homeownership Center is an independent non-profit that specializes in assisting homeowners with their options.  They can be reached at 651-659-9336 and info@hocmn.org. Consumers are urged to reach out early, available options diminish once payments are missed.