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AG Ellison, Gov. Walz, Lt. Gov. Flanagan announce financial institutions will provide additional mortgage-relief options to homeowners facing hardship due to COVID-19

31 Minnesota credit unions and banks to extend some CARES Act mortgage-relief options to customers without a federally-backed mortgage

 


July 2, 2020 (SAINT PAUL)—Minnesota Attorney General Keith Ellison, Governor Tim Walz, and Lieutenant Governor Peggy Flanagan have announced a commitment by 31 Minnesota 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. The framework went into effect yesterday, July 1, 2020, so qualifying customers can begin applying for forbearance immediately.

• 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:

o Allowing customers to add the reduced or missed payments over the lifetime of their loans; or

o 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:

o Freeze all mortgage-related late fees for missed payments; and

o Not report late or missed payments with credit reporting agencies.

This framework was negotiated by Attorney General Ellison’s office and Governor Walz’s office, and was supported by the Minnesota Department of Commerce and Minnesota Housing.

“In the next few weeks, we may see a dramatic increase in the number of foreclosures and evictions. I am very pleased to announce that these banks and credit unions across Minnesota are working together to try to mitigate the damage,” Attorney General Ellison said. “I thank each of the participating institutions for stepping up to the plate to help Minnesotans that are struggling because of COVID-19 and for recognizing that we are all better off when every Minnesotan has stable housing.”

“Minnesota families have been hit hard by the COVID-19 pandemic, and banks across the state have been working with their customers to help find solutions,” said Governor Walz. “This initiative provides some added flexibility to Minnesotans who need help affording their mortgage payments during this unprecedented time.”

“The COVID-19 crisis falls hardest on Minnesotans who were already in crisis. For many low-income families or Minnesotans who have lost jobs or sources of income, their housing stability has been put at risk,” said Lt. Governor Peggy Flanagan. “Mortgage relief is one way that we can provide some comfort and stability for those most impacted. I am thrilled that we can work in partnership to offer this relief.”

Andy Cecere, President and CEO of US Bancorp:

“I want to thank Governor Walz, Lt. Governor Flanagan, and Attorney General Ellison for their leadership in these difficult times. At U.S. Bank, we are committed to serving our community and we have aided thousands of customers who are facing financial pressure due to the coronavirus. We remain committed to helping and encourage our customers needing assistance to contact us digitally or over the phone to find the best solution for their situation.”

Jeanne Crain, President and CEO of Bremer Financial Corporation:

“Bremer’s purpose is to cultivate thriving communities, and we have long recognized home stability as foundational to strong communities. We have provided financial assistance to our customers affected by COVID-19 over the past months, and we remain steadfast in our promise to help. I appreciate the Attorney General’s, the Governor’s, and the Lieutenant Governor’s attention to this important issue. Bremer is committed to supporting their efforts to help Minnesotans through these challenging times.”

Mark Cummins, President and CEO of the Minnesota Credit Union Network:

“As not-for-profit financial cooperatives, it’s part of our DNA to help consumers through tough times. Since the COVID-19 pandemic reached Minnesota, the state’s credit unions have provided hundreds of thousands of their members relief from mortgages, auto loans, credit-card payments, and business loans. Minnesota Credit Unions are proud to participate in the Mortgage Forbearance Relief Framework and are committed to meeting the financial needs of consumers through this evolving situation.”

The provisions of the framework apply to loans serviced by participating financial institutions to the extent allowed by the applicable servicing framework with the owner and/or insurer of the loan. They do not apply to loans serviced by another bank and held in trust for which a bank may act as trustee.

Since the beginning of COVID-19, financial institutions across the state have been working directly with their customers to help find relief options. Customers who have been financially impacted by COVID-19 are encouraged to reach out directly to their lender immediately to discuss what solutions may be available.

This framework is similar to frameworks reached in California, Michigan, Pennsylvania, and other states.

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, missed, or skipped payments with credit-reporting agencies.

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 reduced 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 one-on-one with their borrowers on a range of options for assistance, and encourage borrowers impacted by COVID-19 to reach out to them.

If you need relief and 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 October 1, 2020, contact your lender as early as possible.

What if I need assistance requesting relief?

The Minnesota Homeownership Center is an independent nonprofit 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, as available options diminish once payments are missed.

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 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

• TopLine Federal Credit Union

• Two Harbors Federal Credit Union

• US Bank

• Virginia Co-op Credit Union

• Wakota Federal Credit Union

• Wings Financial Credit Union

 

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