Mortgage Relief Agreement for CT’s Residents and Businesses

News 13 Apr, 2020

Governor Ned Lamont announced on March 31 that his administration has reached an agreement with over 50 credit unions and banks in Connecticut to offer mortgage relief to the state’s residents and businesses who continue to face hardship caused by the global COVID-19 pandemic.

By Tribuna Staff | Translated by Jamal Fox & Helayne Lillo

Governor Ned Lamont announced on March 31 that his administration has reached an agreement with over 50 credit unions and banks in Connecticut to offer mortgage relief to the state’s residents and businesses who continue to face hardship caused by the global COVID-19 pandemic. Under the agreement, the following relief policies are being offered by participating financial institutions:

  • 90-day grace period for all mortgage payments: Participating financial institutions are now offering mortgage-payment forbearances of up to 90 days, which will allow homeowners to reduce or delay monthly mortgage payments. In addition, the institutions will:
    • Provide a streamlined process for requesting forbearance for COVID-19-related reasons, supported with available documentation;
    • Confirm the approval and terms of the forbearance program; and
    • Provide the opportunity to extend forbearance agreements if faced with continued hardship resulting from COVID-19.
  • Relief from fees and charges for 90 days: For at least 90 days, participating financial institutions will waive or refund mortgage-related late fees and other fees including early CD withdrawals.
  • No new foreclosures for 60 days: Financial institutions will not start any foreclosure sales or evictions.
  • No credit score changes for accessing relief: For those taking advantage of this COVID-19-related relief, late or missed payments will not be shared with credit reporting agencies.

The agreement, which was negotiated on behalf of the Lamont administration by Commissioner Jorge Perez at the Connecticut Department of Banking, builds upon similar initiatives that have been enacted in recent days in California and New Jersey, and has been endorsed by the Connecticut Bankers Association and the Credit Union League of Connecticut. More than 50 credit unions and banks statewide are participating, including Webster Bank, American Eagle Financial Credit Union, Liberty Bank, Charter Oak Federal Credit Union, Bank of America, Nutmeg State Financial Credit Union and Peoples United Bank. Additional financial institutions are expected to join the initiative in the coming days. The Department of Banking will maintain an updated list of participating institutions on its website: https://portal.ct.gov/dob

“This agreement with our financial institutions will allow Connecticut residents to obtain some relief as this public health emergency has had an impact on thousands of people in our state,” Governor Lamont said. “I thank each of these financial institutions that will provide this relief and applaud their participation in this agreement. The way we are going to get through this crisis is by working together, and this is an example of how we are going to get that done.”

The Department of Banking, along with the state’s banks and credit unions, is reminding residents that their money remains safe during the COVID-19 crisis and protected by the Federal Deposit Insurance Corporation (FDIC) and National Credit Union Administration (NCUA). No deposits have ever been lost under the protection of the FDIC and NCUA.

“This is a time when we need our entire financial services industry to come together to work tirelessly for the people of Connecticut, which is why I have asked the banks and credit unions to join forces and present one united approach which tells all of Connecticut, ‘We are in this together,’” Commissioner Perez said. “I am pleased to see that these efforts are well underway and that they are helping Connecticut residents work through this challenge.”

Leadership at Connecticut’s credit unions and banks said that they are flexibly meeting member and customer needs every day on a case-by-case basis in a number of ways, which may include fee waivers, access to short-term loans, loan deferrals and uninterrupted access to digital services, even though some credit unions and banks have temporarily limited physical access to their lobbies.

Questions and Answers on Connecticut’s COVID-19 Mortgage Relief Agreement

How do I get mortgage relief and/or forbearance?

You should contact and work directly with your mortgage servicer to learn about and apply for available relief. Please note that financial institutions and their services are experiencing high volumes of inquiries.

How long will the forbearance last?

Participating financial institutions are now offering mortgage-payment forbearances of up to 90 days, which will allow homeowners to reduce or delay monthly mortgage payments.

What effect will this have on my credit report?

Financial institutions will not report derogatory information (e.g., late payments) to credit reporting agencies but may report a forbearance, which typically does not alone negatively affect a credit score.

How long will these programs last?

It is still unclear how severe or how long the COVID-19 impacts will be. Financial institutions have committed to necessary relief and will be assessing the ongoing conditions and necessity of continuing relief.

What if my financial institution isn’t offering this relief?

At this time, Webster Bank, American Eagle Financial Credit Union, Liberty Bank, Charter Oak Federal Credit Union, Bank of America, Nutmeg State Financial Credit Union and Peoples United Bank, in addition to over 50 other federal and state-chartered banks, credit unions and servicers are supporting these commitments. The state will welcome any other institution that would like to meet the moment and provide much-needed financial relief to Connecticut residents. The Department of Banking will publish a list of participating financial institutions on its website in the coming days.

What if I already made a payment or was hit with a fee because of COVID-19?

These measures go into effect as of March 31, 2020.

Is the mortgage relief available to businesses?

The relief is currently only available for residential mortgages.

What if my mortgage servicer is not communicative or cooperative?

You can file a complaint with the Department of Banking through the complaint form on the department website or by contacting the department at 860-240-8299 or 1-800-831-7225 (9:00 am to 5:00 pm EST Monday through Friday).

What impact does the CARES Act have?

The CARES Act has important protections for renters and homeowners. In particular, homeowners with mortgage loans that are backed by the federal government through the FHA, Freddie Mac, Fannie Mae or other agencies can receive significant forbearance.

How about commercial loans and commercial mortgages?

Commercial loan or commercial mortgage customers should know that all financial institutions are working proactively with each commercial borrower experiencing challenges. Any bank or credit union commercial customer having financial difficulty, whether for-profit or nonprofit, should call their financial institution as soon as possible. Several important governmental actions have and will provide relief to businesses.

The Lamont administration’s quick actions resulted in Connecticut being one of the first states where businesses can access the U.S. Small Business Administration’s (SBA) economic injury disaster loan program for up to $2 million dollars. In addition, the Connecticut Department of Economic and Community Development quickly created the Connecticut Recovery Bridge Loan program, which will provide up to $50 million of loans to small businesses and nonprofits

Importantly, last month Congress passed the important CARES Act, which includes the Paycheck Protection Program (PPP) and will provide loans and grants of up to $10 million, for companies of up to 500 employees. A wide variety of businesses will be eligible for the PPP as soon as next week and they include but are not limited to: private and public businesses, self-employed and independent contractors, nonprofits, veterans’ organizations, and tribal business concerns. Additional information on the PPP is available at the SBA website at www.sba.gov.

In addition to the PPP, banks and credit unions continue to work with their commercial customers on a case-by-case basis to address the financial needs of their impacted business. We encourage any impacted commercial customers to contact their financial institution.