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What to do if you have nothing to pay for rent or a mortgage during quarantine

When it comes to paying rent — usually today, April 1 — many Americans will face the harsh reality of the coronavirus pandemic, Barbara Corcoran, a well-known real estate expert, said. What to do if you don’t have the opportunity to pay rent or a mortgage during quarantine, says Fox News.

Photo: Shutterstock

“Many are going to call their landlord or simply ignore the need for payment,” Corcoran said. “And I think April 1 will be the first day people really agree on how different things are now.”

According to the Federal Reserve Bank of St. Louis, since millions of Americans are already unemployed, an outbreak of the virus could lead to 47 million lost jobs, and unemployment could reach 32% in the second quarter.

However, according to Corcoran, there are steps you must take if you cannot make payments. The first thing to do if you do not have money is to stop paying rent.

“You will have a much stronger position in the negotiations if you leave yourself money, instead of paying as much as you can, and then beg for forgiveness,” she said.

The next step is to call your landlord before you know that you have a real problem.

“This is really the case when the owner wants to hear your arguments and offer something reasonable that you really can afford,” says Corcoran.

Meanwhile, several major cities, including New York, Boston, Los Angeles, San Francisco and St. Louis, temporarily prohibited evictions. In recent days, tenants across the country are in favor of a general strike and non-payment of rent.

Corcoran said that although this is unfair to landlords, group movements are very strong and should be taken seriously.

On the subject: 'We can't stay idle': tenants promise to go on strike and not pay housing because of coronavirus

Publication experts USA Today answered important questions regarding rent during quarantine.

Will they evict me if I don’t pay the rent?

Probably no. Federal Coronavirus Aid Act includes a moratorium on all evictions from buildings funded by the federal mortgage, such as those funded by Fannie Mae, Freddie Mac, and the Department of Housing and Urban Development. After the exclusion of private mortgages and buildings whose mortgages are repaid, the moratorium covers about 40% of all single-family homes and half of apartment buildings, says Shamus Roller, executive director of the National Housing Law Project.

What if my home is not federally funded?

In at least 34 states and dozens of cities, wider eviction moratoria have been introduced that apply to all rented apartments, many of which last from 30 to 90 days. Thus, most tenants will be protected. In some states, eviction simply cannot be done because the courts are not sitting. For example, in Virginia, eviction cases were suspended until the end of April, but homeowners can file lawsuits to start the process. If the crisis persists in May, the suspension could well continue, said Joe Culin, a lawyer for tenants in Baskin, Jackson and Lasso in Falls Church, Virginia.

But 12 states took no steps to stop the evictions, leaving some tenants vulnerable. Scooter calls for a national eviction moratorium.

Do I have to prove that I lost my income due to coronavirus?

Federal law does not require this, but some states do, Roller says. Arizona authorities, for example, insist renters show “significant revenue loss” due to an outbreak of coronavirus.

Does the moratorium mean that I don’t have to pay for this month at all?

No, it just means the rent is deferred. The moratorium will lead to several months of late payments when the emergency is over. Some tenant protection groups have called for cancellation of rental payments during a crisis. When the crisis is over, Roller says, landlords and tenants will come to an agreement, which may include full or reduced payment and some additional help from the government.

If I do not pay the rent for April, will it affect my credit rating?

According to Roller, your credit rating may be affected if the court ultimately issues an eviction notice against you. In some cities, eviction cases can be handled, but police departments do not handle them during an emergency, he says. Therefore, your credit rating may be affected even if you are not evicted.

Are landlords exempted from mortgage payments?

Federal assistance provides for the waiver of payments on mortgages for up to one year, but only on federal loans. Some states and banks also provide benefits for other types of mortgages. Sooner or later, borrowers will have to work out a repayment plan or a loan modification with a mortgage servicing agency.

However, some states provide moratoria to tenants, but not to tenants, which potentially forces owners to pay their mortgages, utilities, taxes, and other expenses, even if they have less rental income.

On the subject: Federal Coronavirus Aid: A Complete Guide to Questions and Answers

What to do with mortgage payments

Many lenders allow borrowers to skip payments without charging late fees or do not consider such payments to be late, adds Fox News.

As many U.S. households are struggling to cope with the financial problems they faced as a result of the spread of coronavirus, some may worry about paying out a mortgage in April.

As a rule, mortgage payments must be made on the first day of the month, that is, on Wednesday, April 1. But due to the fact that many people are unemployed or have fewer hours, making this payment in April may not be so simple.

If you find yourself in a situation where you cannot afford to pay a mortgage, first contact your lender or service provider to discuss the financial situation in which you are.

“The best advice is to contact lenders and let them know about your situation,” said Bankrate.com chief financial analyst Greg McBride. - There are many options if you behave proactively and make contact. "There are not many options if you just keep silent and do not pay, but they will still track it in two months."

The phone number and mailing address of your mortgage advisor should be listed on your monthly mortgage report.

McBride noted that mortgage payments and car payments - usually the two largest components of the average household budget - can also belong to two classes of lenders who want to work with you on a financial decision.

Mortgage payments may also be temporarily deferred - although interest will be accrued on the main balance sheet.

In the U.S. mortgage coronavirus Special Projects rental housing in the USA

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