DALLAS (CBSDFW.COM) — Despite losing their jobs, millions of Americans will be expected to pay their bills this month.
Consumer advocates suggest immediately informing lenders of a financial hardship due to COVID-19 before potential late fees kick in.
Greg McBride, the chief financial analyst for Bankrate.com, predicts many companies will be offering forebearance programs in light of the pandemic.
“Forebearance is a term we’re all going to become familiar with,” McBride said. “What forebearance is is it basically gives you a time out from having to make monthly payments.”
Under the CARES Act passed by Congress, foreclosures for federally-backed mortgages, such as FHA loans, have been suspended. The relief package also allows borrowers to seek forebearance plans.
Federally-backed mortgages include loans from the U.S. Federal Housing Administration, the U.S. Department of Housing and Urban Development, the U.S. Department of Veterans Affairs, the U.S. Department of Agriculture and mortgages backed by Freddie Mac and Fannie Mae, which are controlled by the federal government.
But other mortgages that are not backed by federal funds may also be eligible for assistance.
Truist, formerly BB&T and SunTrust, is offering forebearance plans to affected customers for 90 days.
Ally said it will defer mortgage payments for up to 120 days.
Car payments are another expense to consider.
What companies are not offering is debt forgiveness.
“If this is a car loan that you’ve had trouble making payments to begin with, maybe you bit off more than you can chew, rather than kick the can down the road with a forebearance plan, maybe you want to talk to your lender about downsizing for another vehicle or turning the vehicle in,” McBride said.
But even if a company pauses payment, consumers are not off the hook. Interest rates can still accure.
The U.S. Public Interest Research Group published a guide on bill assistance.
“Prioritize your highest interest rate debt right now or work with specific providers to have your monthly payment waived or reduced,” said Bay Scoggin, the state director of the Texas Public Interest Research Group.
Credit card companies are also providing relief.
Issuers like Chase are waiving certain fees for affected customers.
Here is an additional list of other major corporations currently offering assistance:
- Chase — Offering 90-day forebearance period for mortgages; extending car lease agreements up to six months or facilitiate vehicle returns.
- Truist — Offering payment relief up to 90 days for consumer loans, home equity loans, and personal credit cards.
- Citi — Offering deferrment and forebearance plans
- Ally — Will defer mortgage and auto payments for up to 120 days; waiving late banking fees until July
- Capital One — Encouraging affected customers to contact them about financial assistance
- American Express — Financial Hardship Program offers number of options for customers
- Ford — ‘Built to Lend a Hand Program’ gives new customers three months of deferred payment relief, combined with Ford paying for three months; payment deferrals for existing customers available
- Toyota — Offering payment relief for current customers; 90-day payment deferral for new customers
- General Motors — Late fees will be automatically waived until April 30