HARTFORD, CT (WFSB) -- On Tuesday, Gov. Ned Lamont and other leaders announced a 90-day grace period for mortgage payments for people impacted by coronavirus.
He said his administration has reached an agreement with over 50 credit unions and banks in the state to offer relief to the state’s residents and businesses who continue to face hardship caused by COVID-19.
"If you have a mortgage and you were a barber shop worker, restaurant worker, any worker, and you were laid off, furloughed, or your income has changed, you’re to call your financial institution or mortgage service and let them know you’ve been impacted by COVID-19 and they will work with you," said Banking Commissioner Jorge Perez.
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 approval and terms of 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.
Among the more than 62 credit unions and banks statewide participating, include 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.
Leaders said the Department of Banking will maintain updated list of participating institutions on its website here.
This doesn't mean you don't have to pay it back, however. Bruce Adams, the president of the Credit Union League of Connecticut, which has about 70 members, said each person has different circumstances.
"Sometimes you just need a month or two, because you've got something in the works. Sometimes maybe you have been furloughed and you know you are going to get your job back," Adams said.
“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.”
Leaders are also reminding customers with loans to stay in close contact with their financial institution to identify their particular needs and work on customized solutions. They are also reminding customers that measures to protect people's health and safety continue to be available:
• Drive-through services are available at numerous branches;
• Individual appointments for in-person meetings are available at many financial institutions;
• Call centers employees stand ready to assist customers and members;
• Technology platforms give ready access to online services like bill pay, transfers, remote depositing of checks and ATMs for cash needs; and
• People can use mobile payment channels and debit cards or credit cards to make purchases.
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 servicers 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 week 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 should be available from the SBA early next week.
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.