State hits a home run: mortgage payment relief

Often, and lately almost constantly, I've criticized state leaders in Minnesota. Here's a chance for me to share information on what I'll just call a "home run" that they have delivered for the citizens of the North Star state:

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:
  • 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.

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.