DAVID GREENE, HOST:
All right. We do have some reassuring news this morning for homeowners across the country. The federal government is telling lenders to give people up to a year-long break on their mortgage if they have lost income because of the pandemic. Here's NPR's Chris Arnold.
CHRIS ARNOLD, BYLINE: The way this should work is that if you've been hurt financially, you can make reduced mortgage payments or be granted a complete pause in payments for up to 12 months. Mark Calabria is the director of the Federal Housing Finance Agency. But he says - and this is really important - people cannot just stop making mortgage payments. There are steps that you need to take.
MARK CALABRIA: They need to contact their servicer - that is the lender that they send the check to every month and deal with. And that lender will work with them to be able to work out a payment plan. Obviously, we hope to get them back on their feet as soon as possible.
ARNOLD: Since things are happening so quickly, Calabria says that to qualify, you can just call your lender and tell them I lost my job or half my income or whatever has happened. And documenting the hardship can come later.
CALABRIA: You're not going to have to send 20 pieces of paper at the front of this. We want to do it quickly.
ARNOLD: Technically, this covers about half of all home loans in the country - those guaranteed by the mortgage giants Fannie Mae and Freddie Mac. But regulators expect that the entire industry will quickly adopt a similar policy. Wells Fargo and JPMorgan Chase say they will work with borrowers who can't make payments.
For all this to work right, lenders will have to follow through and do what the government is directing them to. Also this is not free money. Homeowners will work out a repayment plan once they recover financially. That might just involve extending the term of the loan.
CHRIS MAYER: I think this is a great first step.
ARNOLD: Chris Mayer is a real estate economist at Columbia University's business school. He says this should be reassuring to a lot of people.
MAYER: That's critically important at this point so we just don't have mass panic and we don't have people, you know, worried about the potential to lose their homes.
ARNOLD: Also if you call and get into one of these plans, Fannie and Freddie are telling lenders not to report the missed payments to the credit bureaus. And Mayer says that's also a very big deal. He says it would be bad for the economy if millions of people get their credit scores wrecked because of a pandemic that they absolutely couldn't control.
MAYER: We don't want people to suddenly be declared delinquent and to lose their access to credit. And then suddenly, we have a problem that's not a three or six-month problem. Then suddenly we have a problem that's much deeper and bigger.
ARNOLD: But again, if homeowners don't contact their lender and get approved for this, missing payments will badly damage their credit. You need to contact your lender and say, I need help. Lenders are also halting foreclosures. OK. So all this is good news for homeowners. But for renters, so far, many cities are saying that they're halting evictions if renters can't pay. But that's about it, says Laurie Goodman at the Urban Institute.
LAURIE GOODMAN: There have been very, very little actions taken for renters. And in fact, the renter population is far more vulnerable than the homeowner population because, on average, they're just much, much less affluent, have much less in savings.
ARNOLD: Goodman would like to see some sort of renter assistance program from the federal government.
Chris Arnold, NPR News.
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