Last week a congressman from the Sunshine State looked to help homeowners during the coronavirus pandemic by introducing a bill to cut down on balloon payments of mortgages.
U.S. Rep. Darren Soto, D-Fla., brought out the “Save Our Homes Act” which his office dubbed “a bill that would create a simple, national plan for homeowners to save their homes from foreclosure in the midst of the coronavirus pandemic.”
Soto’s office offered some of the details on the proposal last week.
“Upon request, struggling homeowners receive a six-month forbearance plan and extension. After the forbearance period, they can begin making monthly mortgage payments. This would keep homeowners from being required to pay large balloon payments,” Soto’s office noted. “Central Floridians were devastated by thousands of foreclosures during the Great Recession. Learning from the lessons of the past, Congressman Soto’s bill will help stop this tragedy from striking again. Those who face foreclosure could get a well-needed reprieve to start their payments again. The Save Our Homes Act would lead to greater long-term stability for home values and the local real estate market, protecting the nest egg of millions of other homeowners who may not otherwise be financially affected by the COVID-19 crisis.
“Under the CARES Act, a borrower with a federally-related mortgage loan experiencing hardship due to the coronavirus crisis may request forbearance to the borrower’s servicer for up to 180 days. While helpful, many borrowers have expressed concerns that servicers are offering a balloon payment option that would require the entire amount owed for the forbearance period to be paid at once. Most struggling homeowners do not have the money to make this lump sum payment when they’ve just recovered from COVID-19, job loss or other financial hardship,” Soto’s office added.
“The effects of the coronavirus are hard-hitting and being felt across all sectors of American life,” said Soto. “Due to COVID-19 illnesses, layoffs and mass unemployment, millions of homeowners need a simple national plan for real relief. The Save Our Homes Act gives Central Floridians and all Americans a real chance to save their homes and recover from this crisis.”
The bill would have applicants have to show they have been economically hurt by the coronavirus pandemic. Under the bill, stimulus checks would not be included in income calculations. According to Soto’s office, a “borrower would have to have a mortgage-backed by any financial institution using RESPA accounts, which will qualify most Americans’ mortgages.”
Soto has rounded up nine cosponsors including fellow Florida Democrats U.S. Reps. Kathy Castor and Frederica Wilson. The bill was sent to the U.S. House Financial Services Committee last week. So far, there is no counterpart over in the U.S. Senate.
Reach Kevin Derby at email@example.com.