As the rapid spread of the COVID-19 virus brings the U.S. economy to a painful halt, CBC Mortgage Agency (CBCMA), a nationally chartered housing finance agency and a leading down payment assistance source for first-time homebuyers, announced it is taking steps to ensure its borrowers are able to stay in their homes during the crisis.
Many CBCMA borrowers receive a forgivable second mortgage in order to pay for closing costs and a down payment. As a condition of that forgiveness, a borrower must maintain timely payments on the first mortgage during the first three years of the loan. In response to growing borrower concerns about the economy, CBCMA announced any borrowers facing possible job loss would not lose the forgivable feature of their second mortgage.
“There’s a crisis upon us, and the economic repercussions are only beginning to be understood,” CBCMA President Richard Ferguson said. “What we do know is that COVID-19 is causing a severe shock to our economy and loss of income for many, including the new homeowners we’ve striven so hard to help. The measures we’re taking today are intended to help our borrowers keep their homes during this very challenging time.”
Since the pandemic, Ferguson said, questions have poured into CBCMA from borrowers who are concerned about the status of their loan forgiveness, should they lose their jobs in the current economic environment.
In addition to protecting the forgivable feature of its down payment assistance program, CBCMA is reaching out to borrowers and offering education on how to handle the crisis. Through a letter sent by Money Management International, a HUD-approved nonprofit counseling service, the company is advising borrowers not to overreact even as the barrage of constant coronavirus news coverage unfolds.
CBCMA is also counseling borrowers to reduce the impact of the pandemic by cutting their expenses. This includes not overbuying supplies and not making future travel and event plans that include non-refundable fees. In addition, borrowers are encouraged to stay current on their mortgages if possible. If a borrower is facing economic disruption, CBCMA will counsel them by reviewing their budget and finding ways for them to prioritize their spending.
“We expect more calls from borrowers asking us for help in dealing with their challenges, and we will continue stepping up to provide assistance,” Ferguson said. “Doing so is just as important as helping borrowers overcome down payment barriers so they can afford the dream of homeownership – which is a dream worth protecting, especially today.”