Updated 4/2/20 at 10:12 AM
CEI has a long history of supporting the financial wellness of both businesses and individuals. Our HUD-certified housing counselors and Financial Counseling Association of America (FCAA) and Neighborworks America-certified financial wellness coaches are available to assist you with questions and connect you to resources.
Health Care & Social Services
For up to date Resources on Social Service programs including MaineCare, School Lunches, SNAP, TANF, General Assistance Housing and more, visit https://maineequaljustice.org/people/covid-19-resources/
How to Avoid Coronavirus Scams
Here are some tips to help you keep the scammers at bay:
• Hang up on robocalls. Don’t press any numbers. Scammers are using illegal robocalls to pitch everything from scam Coronavirus treatments to work-at-home schemes. The recording might say that pressing a number will let you speak to a live operator or remove you from their call list, but it might lead to more robocalls, instead.
• Fact-check information. Scammers, and sometimes well-meaning people, share information that hasn’t been verified. Before you pass on any messages, contact trusted sources. Visit What the U.S. Government is Doing for links to federal, state and local government agencies.
• Know who you’re buying from. Online sellers may claim to have in-demand products, like cleaning, household, and health and medical supplies when, in fact, they don’t.
• Don’t respond to texts and emails about checks from the government. The details are still being worked out. Anyone who tells you they can get you the money now is a scammer.
• Don’t click on links from sources you don’t know. They could download viruses onto your computer or device.
• Watch for emails claiming to be from the Centers for Disease Control and Prevention (CDC) or experts saying they have information about the virus. For the most up-to-date information about the Coronavirus, visit the Centers for Disease Control and Prevention (CDC) and the World Health Organization (WHO).
• Ignore online offers for vaccinations. There currently are no vaccines, pills, potions, lotions, lozenges or other prescription or over-the-counter products available to treat or cure Coronavirus disease 2019 (COVID-19) — online or in stores.
• Do your homework when it comes to donations, whether through charities or crowdfunding sites. Don’t let anyone rush you into donating. If someone wants donations in cash, by gift card, or by wiring money, don’t do it!!
Employees & Individuals
Paid Sick/Family Leave
- Employee Rights – Paid Sick Leave and Expanded Family and Medical Leave under The Families First Coronavirus
- Unemployment Insurance Guidance
- Unemployment FAQs (ME Department of Labor)
- Economic Injury Disaster Loans for Individuals (FAME Maine)
- For an employee, self-employed person, sole proprietor, “1099” worker, other individual who has experienced a loss of income due to circumstances related to the novel corona virus known as COVID-19.
- An individual who meets eligibility criteria may apply for up to 3 loans (once a month for up to three months), each equal to their monthly after-tax pay, up to $5,000, minus unemployment benefits received. For sole proprietors or self-employed people, the eligible amount is based upon the most recent monthly after-tax revenues, up to $5,000.
- CARES Act
- In addition to any weekly unemployment compensation available to an individual under state law, unemployed individuals are entitled to an additional $600 per week for a period lasting until July 31, 2020, termed “Federal Pandemic Unemployment Compensation.”
- Individuals who self-certify that they have been adversely affected by the COVID-19 pandemic, including individuals who typically are not otherwise entitled to unemployment compensation under state law (e.g., self-employed), may receive unemployment compensation for a period of up to 39 weeks commencing January 27, 2020.
- You may also visit the DOL’s Coronavirus Resources page for additional information for employees.
Americans who pay taxes will receive a one-time direct deposit (or check) of up to $1,200 for individuals, and married couples will receive up to $2,400, plus an additional $500 per child. The payments will be available for incomes up to $75,000 for individuals and $150,000 for married couples. The actual amount of the check will be based on your adjusted gross income from your 2019 tax return (or 2018, if 2019 is not filed yet).
Borrowers of federal student loans will not be required to make student loan payments prior to September 30, 2020, and interest on the loans will not accrue during such time period. For more information, visit the Department of Education’s Federal Student Aid website.
- COVID-19 hardship distributions where the 10% early withdrawal penalty is waived.
- COVID-19 distribution options apply to both Employees and Business Owners.
- Loan limit increase (up to $100,000).
- Delayed Loan repayments for up to 1 year.
- Required Minimum Distributions are not required from qualified retirement plans for 2020.
CARES Act Mortgage & Foreclosure Relief
The CARES Act has provisions affording individuals the ability to defer mortgage payments under certain circumstances. This relief is limited to loans backed by the federal government. Individuals affected by the COVID-19 pandemic may seek a forbearance of payment on their federally backed mortgage for a period of up to 180 days. Owners of multifamily homes with a federally backed mortgage may seek forbearance of payment for up to 90 days, provided they do not attempt to evict a tenant or charge late fees.
Lenders of federally backed mortgages are prohibited from instituting foreclosure on a borrower for a 60-day period commencing March 18, 2020. Landlords who have federally backed mortgages are prohibited from initiating eviction proceedings against tenants for the 120-day period following the enactment of the CARES Act.
More information and resources on mortgage payment relief are available from the Federal Housing Finance Authority.
CEI Default Management and Foreclosure Prevention
(Cumberland, Sagadahoc, and Lincoln Counties)
The valid need to socially distance is a potentially catastrophic development for many employees and small business owners. While those who are unable to work remotely and cannot afford to shelter in place can risk continued exposure and eventual illness, many more will find themselves without income at all as restaurants, bars, and other like venues are shuttered. It is asking many people to make truly impossible choices in some cases between economy and health or family.
If you are having difficulty paying your mortgage, are in foreclosure or fear that you may be soon, CEI can help. Our counselors are certified to assist homeowners at any stage of mortgage delinquency or foreclosure in Maine. Many homeowners have already tried to work with their lenders and may be frustrated by that experience. Don’t give up! Most of the time your bank does not want your home. There are many options for homeowners, but the process of default and foreclosure is often a scary and confusing one. Regardless of your circumstance or location, please know that there is no-cost assistance available for struggling homeowners from HUD-certified agencies. For assistance, email email@example.com
Mortgage forbearance is a practice where a borrower might receive significantly reduced payments over a period of time (months) and the difference between the mortgage’s contractual payment and the reduced amount are “added up” to come due at the end of the agreed period.
The problems with mortgage forbearance in this case are multiple. First, borrowers are unlikely to have access to the lump sum of the difference in payment at period’s end. Also, these temporary agreements are often not correctly reported to the credit reporting agencies at the best of times, let alone if these are done en masse. The only viable option to consider if forbearances are offered is to “dovetail” these programs with a full loan modification where the lump sum resulting from the unpaid accrued interest is capitalized into effectively a new loan, capitalized over 360 or 480 months ideally with a reduced interest rate. In a program truly designed to offer borrower’s relief, this interest should be waived – especially with the recent federal funds rate changes taken into consideration.
Forbearances are options for those borrowers who might have a very short-term cash flow issue where they need a 30 or 60 day respite from large contractual payments, but will have deferred funds available to catch up once the program expires.
Note: Some forbearances do not eliminate payments – in fact, most do not. Rather they amount to a significant reduction in the monthly payment based on the need of the borrower.
If the need is no payment at all, a program called a moratorium (only really utilized by the USDA on their direct loan mortgages) is more effective and appropriate. A moratorium allows a borrower to go without payments for a longer period of time (6-18 months) and the accrued interest is simply capitalized into the existing loan term at the end of the program. Admittedly, the USDA model does not reduce interest rates or extended the original contractual term, which can make the monthly payment increase slightly at the end of the program, but it does offer more relief during the effected time frame and reports more accurately to the credit reports.
Items for Consideration
In this situation, are you really going to be in a position to save this lump sum amount? Perhaps borrowing from family or some against retirement accounts could be an option, although not a good one.
The issue in taking on additional loans are that these loss mitigation programs may make some ineligible for refinance or additional debt. The issue could be credit reporting, a damaged loan to value ratio by adding housing debt if property values or the housing market suffer in the interim, or simply a restricted “lending box” which was a real crisis coming out of the 2008 collapse.
In Maine, a judicial foreclosure state, once a lump sum stemming from a forbearance plan is not satisfied in short order, the loan can be moved toward a foreclosure action equally quickly.
There are really on two “levers” that borrowers can examine, aside from federally mandated or voluntary lender programs, income and expenses. If income is stagnated, then expenses are the only place where they might effect change. Credit cards and other, smaller consumer debt payments that don’t have collateral make more noise than mortgages since they have nothing to collect. Many consumers choose to make these 3-4 smaller payments at times since one, they will call constantly to collect money and two, the feeling of making 3-4 small payments make people feel that they are being more responsible. The fact is, however, that one cannot live in a credit card or consumer loan. People would do well to save as much as possible, even if it’s not enough to make a monthly, contractual payment. They are better served to save towards the mortgage payment and make it in its entirety as soon as possible. Admittedly, in an unprecedented situation such as this, outside intervention is surely needed.
Some will be fortunate to have friends and family to assist them but, if not, whatever state/federal program is decided upon will have huge ramifications for millions of borrowers and renters.
Theoretically, no as lenders and credit reports should be updating the new, short-term payment as the agreed upon amount during the duration of the program. The reality, however, is that this often does not happen unless the consumer is diligent in watching these reports monthly and holding those parties accountable by filing disputes if needed.
How to Talk to Your Lender
Forbearance agreements are part of what lenders call “loss mitigation”. It is also a program that is usually only considered for short-term challenges. Lenders want to see that the issue is not long-term or permanent (which is hard to make a case for at this point) and that borrowers will have the ability to make the missed payments up in short-order. Sadly, these are not programs that the loan servicers have any autonomy to tailor to individual borrowers and there is not any real room for negotiation. These are programs that are dictated by loan investors, such as Fannie Mae and Freddie Mac, and are part of pooling and servicing agreements that are dictated when a group of loans are made.
You do not have to fall behind or become delinquent to get assistance. This was a pervasive message that loan servicers gave to borrowers during the 2008 mortgage crisis and, more often than not, there was no guaranteed approval for assistance and many found themselves 3-4 months behind, now headed towards a foreclosure action, with no means of dealing with the arrears.
New Mainers & Immigrants
Amjambo Africa has added a Covid-19 button on its
homepage that takes visitors to material in these languages: French, Portuguese, Somali, Kinyarwanda, Swahili. They are planning to add Lingala, Kirundi, and Arabic in the near future. https://www.amjamboafrica.com/covid-19-updates/