Tennessee launches program to help COVID mortgage delinquencies

Homeowners in Tennessee who have fallen behind on their mortgages, property taxes or home insurance due to the COVID-19[female[feminine pandemic receive a new economic lifeline this week.

The Tennessee Housing Development Agency is launching a new federally funded program Monday that will pay up to $ 40,000 for every household that has suffered from the ongoing pandemic and is behind on housing-related bills.

The American Rescue Plan, the stimulus package passed by Congressional Democrats in March to help ease economic hardship from COVID-19, provides the National Housing Agency with $ 168 million to help affected Tennessee homeowners by the pandemic. Nationally, Congress has allocated nearly $ 10 billion to help homeowners affected by the pandemic to limit foreclosures, bankruptcies, and unpaid debts and taxes.

(READ MORE: States and cities slow to spend federal money during pandemic)

“We believe this funding will greatly assist homeowners in Tennessee who have not been able to make their mortgage payments through no fault of their own,” said National Housing Agency Executive Director Ralph M. Perrey, on a phone. interview. “We have a lot of people who were good mortgage holders and payers until COVID-19 caused them to lose their jobs, cut their hours or force them to deal with family illnesses, deaths and illnesses. quarantines. This program is designed to help make those owners whole. again because they are late for reasons which are not of their own initiative. “

Eligible beneficiaries can receive up to $ 40,000 each to pay for past due mortgage payments, property taxes, insurance premiums, homeowners association fees and other specified housing costs.

Tennessee is one of the first states to launch its Homeowner Assistance Program, but other states are preparing similar relief efforts. The stimulus package allocates $ 354.2 million to Georgia and $ 125.7 million to Alabama from the federally funded Home Assistance Fund program, according to the US Department of the Treasury.

According to 2021 figures from CoreLogic, 3.3% of Tennessee mortgage holders are more than 90 days late on their mortgage payments. Perrey said it was nearly double the mortgage delinquency rate before the pandemic.

In Hamilton County, 2.69% of mortgage holders are over 90 days past due, while in Bradley County, 3.14% were in arrears, according to CoreLogic. Delinquency rates for other counties in the region include Rhea at 3.78%, Bledsoe at 3.67%, Marion at 3.29%, Meigs at 3.23% and Sequatchie at 2.32%.

(READ MORE: Chattanooga, Hamilton County could see $ 25 million for sewer needs under state plan)

Despite the increase in defaults, foreclosures and bankruptcies have remained limited during much of the pandemic under federal regulations, relief programs and market trends.

Falling interest rates and rising home values ​​combined to create an increase in mortgage refinancing volume last year. Until the summer, delinquent mortgage creditors were also protected from eviction thanks to a moratorium on foreclosures on federally guaranteed loans. Since the moratorium was lifted last year, the prospect of additional relief from the home help program has also discouraged many lenders from entering the costly foreclosure process, acknowledging that they could be paid off on debts. unpaid bills of the new federal program.

Homeowners who live in Tennessee, have a family income of less than $ 119,850, and experienced financial hardship after Jan.21, 2020, related to the COVID-19 health crisis, can start seeking help Monday on Monday. state website at thda.org/HAF or from any of 28 participating lenders across the state, including local offices of First Horizon Bank, Pinnacle Financial Corp., Bancorp South, Bank of America, and Trustmark Mortgage.

(READ MORE: Chattanooga wants to use federal COVID funds to build emergency homeless shelter)

Difficulties eligible for assistance include unemployment, underemployment (loss of income), the death of an occupying spouse or co-borrower or an increase in certain expenses directly related to COVID-19.

Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340.

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