Coronavirus (COVID-19) Financial Updates

As a Florida mortgage company in Miami, Ross Home Loans has been helping Floridians purchase homes and reduce mortgage payments for more than 15 years. The COVID-19 crisis, globally, is adversely effecting economies, social life and most importantly families.  The Coronavirus after-effects will resonate for years to come and we all must to our part to help each other as a society.

Ross Home Loans is dedicated to helping homeowners, business owners and home buyers obtain financing during this challenging time. Options provided by the federal government, State of Florida and financial institutions can be confusing and difficult to understand. Ross Home Loans can potentially help guide you in evaluating the financing options you find appropriate for your individual situation.

Its important to understand that not all people will be able to purchase a home or refinance even as rates decline. Many lenders face overwhelming inquiries, staffing challenges, and product challenges due to the market. More importantly, lenders are concerned with home values, borrowers’ future employment and the economy as a whole.  Many lenders have tightened requirements to obtain financing and/or suspended products such as refinances, adjustable rate mortgages, jumbo mortgages, commercial financing and other loan products. Some people who once thought purchasing a residential or commercial property or refinancing would be easy may now find their options limited or unavailable now or in the near future during this pandemic.

Ross Home Loans and our team of mortgage professionals can review your information so that together, we can find the path you find appropriate for you during this difficult time. Every situation is different and our team will leverage our ability to access multiple lenders to provide you more options and better rates when available. Please contact our team for a free consultation and rate quote to help determine what are your best options.

Phone number 305-763-8023

Florida Stay At Home Order

Due to threat of COVID-19 to public health, Florida Governor Ron DeSantis has mandated a 30-day stay at home order as of April 3rd, 2020 and will last until April 30th, 2020; unless extended. The executive order is consistent with the federal Centers for Disease Control and Prevention.

FAQ for Executive Order 20-91

Essential Services List – Occupations that are considered essential and are not barred from travel.

Many of the policies of this order that are in place are derived from the guidance of the CDC on 30 Days to Slow the Spread.

As the Stay at Home Order is set to expire, Florida Gov. Ron DeSantis has appointed a committee to come up with ways to reopen the state for business. Ross Home Loans will update you as information is released.

National Relief – Congressional Coronavirus Aid Efforts

Congress passed three bills to provide for COVID-19 relief. The first bill provided $8.3 billion in emergency funds to ensure federal agencies, states and localities have the resources to respond to the COVID-19 health crisis. Congress passed the second relief bill, the Families First Coronavirus Response Act, which allows for the following:

• Paid sick leave and paid family and medical leave for Americans impacted by this virus with a tax credit for the employers’ portion of the Old-Age, Survivors, and Disability Insurance (OASDI) component of payroll taxes to help companies afford cost of the paid leave. The bill provides for 2 weeks of paid sick leave if are unable to work because you are subject to quarantine or are experiencing symptoms of COVID–19 or if you are caring for a family member that is impacted. Plus, it gives 12 weeks paid sick leave if you are caring for a child while their school is closed. This paid sick leave applies to Americans who work have been employed for at least 30 days and work for either a small- or mid-sized company, or for the government;
• Free coronavirus testing for all Americans regardless of health insurance status. Please note, this does not cover the cost of treatment only the cost of the test;
• $140 billion to boost funding for unemployment insurance and nutrition assistance for children, seniors, and low-income families;

The following is an outline of the third bill, a $2 trillion economic relief package called The Coronavirus Aid, Relief, and Economic Security Act or “CARES” Act:

• Direct payments to individuals – the stimulus legislation provides for a direct payment to lower and middle-income Americans of $1,200 for each adult, plus $500 for each child in the household. The payments start to phase out at the $75k income level and would be cut off at the $99k level. These income amounts would double for married couples. Individuals will use the income listed in their 2019 tax returns to qualify, or the income in their 2018 return, if they have not filed their 2019 return yet. If the Internal Revenue Service already has an individual’s bank account information, it would transfer the money to their bank account via direct deposit. These payments have started to go out to eligible recipients. Individuals on fixed income such as social security will also be entitled to these benefits.
• Expansion of unemployment benefits – The legislation extends unemployment insurance an additional 13 weeks to a maximum of 39 weeks.
• Student loan relief – While President Trump had announced previously that interest on federal student loans would be temporarily suspended, the relief package defers all federal student loans until November 2020. This relief is not automatic and student loan borrowers should contact their servicer to request to defer their payments. Borrowers with private student loans who are unable to make their payments should also contact their servicers to see if they are any options for them.
• Relief for companies – the relief package allocates $500 billion that will be used to guarantee loans and assistance to large companies, including $50 billion for loans to U.S. airlines. The bill provides a tax credit for companies who retain employees even if they have been mandated to close or seen a significant drop-off revenue.
• Relief for small business – The bill would also give $350 billion to aid small businesses. Loans can be used for payroll, paid sick, medical, or family leave, health care benefits, mortgage payments and rent, utilities, and other debt. No collateral or personal guarantee would be required. Loans are potentially eligible for forgiveness. Additional information on the various lending programs follows.

Help for Small Businesses Affected By The Coronavirus Crisis

The aid to small business funded by the CARES Act will be handled by the U.S. Small Business Administration (SBA) however some of the loans will be processed by SBA-approved lenders and not directly by the SBA itself. There are three different loan programs that small businesses may want to consider if they have been impacted by Coronavirus.

The Paycheck Protection Program (PPP) provides loans designed to provide a direct incentive for small businesses to keep their workers on the payroll. The program helps small businesses with fewer than 500 employees by lending them up to two months of payroll costs. Each loan capped at $10 million. No collateral or personal guarantees are required for PPP loans. Sole proprietors, independent contractors, and self-employed persons may also qualify for these loans. The PPP loan will be forgiven if all employees are kept on the payroll for eight weeks and at least 75% of the loan amount is used for payroll. The other 25% can be used for certain other expenses, such as rent, mortgage interest, utilities or employer covered health benefits. Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels and the amount of forgiveness will be reduced if the number of full-time employees declines, or if wages decrease. The loan portion not forgiven will have a maturity period of 2 years and an interest rate of 1%. Under the program, neither the government nor lenders will charge small businesses any fees. The SBA recommends contacting your local lender to see if they are participating in the program. These loans are made by banks, credit unions and other regulated lenders that have been approved by the SBA. Please note that PPP loan may not be well suited for businesses, such as bars and restaurants, that do not know they will be able to return to normal operations. The Paycheck Protection Program will be available through June 30, 2020.

Unfortunately, the rollout of the PPP has been fraught with problems and now the program is likely to run out of money soon unless Congress authorizes additional funding which is presently being negotiated. Considering their great need and attractive terms, there has been a mad rush to submit applications and because of that, the portals of some lender websites could not handle the volume and would crash. It is now recommended that businesses submit their applications off hours. Over 725,000 loans have been approved as of April 11, 2020, however it is not clear whether business have received the money they requested. Some business report that they have received much less than the amount needed to get through the crisis. Other businesses are in limbo and are still waiting for a response on their application. Making it more frustrating for small business owners, it is that it is difficult to obtain the status of an application. Compounding the problem with obtaining these loans, many lenders restricted the application to current customers and even with that, the customer needed an existing loan with the lender. However, recently, some non-traditional lending institutions, such as PayPal, Cabbage and other non-conventional lenders have been approved by the SBA and are now accepting loan requests. Businesses have reported that these companies have been able to process the loans faster than traditional banks.

PPP Information: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp

SBA Economic Injury Disaster Loans (EIDL) are offered through an existing program with the SBA. They are intended to help provide the necessary working capital for small businesses to financially survive until normal operations resume after a disaster (such as the Coronavirus crisis). EIDL assistance is available only to small businesses when SBA determines they are unable to obtain credit elsewhere. Traditionally, EIDLs can provide up to $2 million to help meet financial obligations and operating expenses that could have been met had the disaster not occurred. The SBA states that the loan amount will be based on the actual economic injury and the company’s financial needs. The interest rate on EIDLs will not exceed 4 percent per year. The term of these loans will not exceed 30 years. The repayment term will be determined by the company’s ability to repay the loan. The loans are made directly by the SBA through their website.

Applicants for EIDL can request a $10,000 advance on their loan in form of a grant which does not need to be paid back. EIDL advances funds were supposed to be available to applicants within three days of their application, even if they weren’t approved for a loan. According to the New York Times, more than 400 applicants have reported to them that this has not happened, and we suspect that there are many more businesses in this same situation.

In the face of the pandemic, the loan program has been overwhelmed by requests. Many applicants have waited weeks for approval, with little to no information about the status of their applications. Some businesses have reported that they are being told that they will receive only a fraction of what they requested. The EIDL program is supposed to offer loans of up to $2 million, but according to the New York Times, many recent applicants said the SBA help line had told them that loans would be capped at $15,000 per borrower, only $5,000 more than the advance amount.

EIDL Program Information: https://disasterloan.sba.gov/ela/

EIDL Advances Information: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance

The Express Bridge Loan Pilot Program (EBL) is a recent program from the SBA that allows small businesses who have an existing business relationship with an SBA-approved lender to access up to $25,000 quickly. The program is intended for small businesses in communities suffering from presidentially declared disasters or SBA-declared disasters. These loans are meant to “bridge” the gap while applying for a direct SBA Economic Injury Disaster loan. These loans are repaid in full or in part by proceeds from an EIDL loan. As of March 25, 2020, SBA expanded its program eligibility to small businesses across the country that have sustained financial loss because of the Coronavirus crisis. In addition, EBL lenders must document that EBL applicants had an operating business as of March 13, 2020 and that the applicant was adversely affected by COVID-19, according to SBA’s guidelines. If the coronavirus crisis has affected the normal operations of your business, you may qualify for government help. However, given that the EIDL is reportedly been restricted to $15,000, it is unclear whether an EBL can be made for more than that amount.

Express Bridge Loan Program Guide: https://www.sba.gov/document/support–express-bridge-loan-pilot-program-guide

National Relief – HUD Foreclosure and Eviction Relief & Deferral of Certain Mortgage Payments

Last month, President Trump directed the Department of Housing and Urban Development (HUD) to suspend evictions and foreclosures through April as result of the massive job losses that have been caused by the coronavirus. The HUD foreclosure moratorium applies only to homeowners with mortgages insured by the Federal Housing Administration. This moratorium stops new foreclosures from being filed, existing cases from moving forward and foreclosure sale sales from proceeding.

The Federal Housing Finance Agency (FHFA) also announced that it would suspend foreclosures and evictions for homeowners with mortgages owned by Fannie Mae or Freddie Mac. Furthermore, mortgage borrowers who have loans owned by Fannie Mae and Freddie Mac will be able to defer two months of mortgage payments. A new “payment deferral” option is now available that will allow borrowers facing a hardship to defer two months of their mortgage payments until the end of their mortgage. An eligible Borrower will be brought current by deferring delinquent principal and interest payment, and creating a non-interest bearing balance that will become due at the earlier of following: the Mortgage maturity date, the payoff date, or upon transfer or sale of the property. Even if your loan is not backed by Fannie Mae and Freddie Mac, if you are facing financial hardship, you should contact your servicer to see if there are any options to suspend your mortgage payments during the COVID-19 crisis.

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Contact Ross Home Loans

When seeking to ease your financial burden, we typically look to our largest expense which tends to be our mortgage payments. Refinancing can quickly and drastically reduce your expenses. Its important to understand that qualifying for loans may become more strict in the near term so homeowners should act fast. Ross Home Loans will provide a free consultation to help determine the cost savings benefit of refinancing your home or business. Please contact us for more information or your free rate quote. Our team is standing by to assist you over the phone or through video conferencing.

Please remember you are not alone during this difficult time and we are here for all of your home and business financing needs.

Call us at (305) 763-8023

Ross Home Loans is closely monitoring the COVID-19 crisis and will post updates on this page on an ongoing basis.