State gives guidance on mortgage payments, student loan debt, banking

The Illinois Department of Financial and Professional Regulation issued guidance for lenders and borrowers Monday regarding debt collection during the COVID-19 pandemic.

Evictions are suspended for homes and rental units in Illinois per an executive order by Gov. JB Pritzker, and IDFPR is urging all mortgage servicers to defer payments for 90 days for those suffering hardship as a result of the pandemic.

The department also highlighted a recent executive order suspending repossession of vehicles during the duration of a disaster declaration for COVID-19.

The Illinois Attorney General’s office is fielding complaints about unfair business practices at https://ccformsubmission.ilattorneygeneral.net/, while more information on banking complaints can be found at IDFPR’s website at https://www.idfpr.com/admin/banks/DoBcomplaints.asp.

For questions or complaints about licensed consumer lenders, Illinoisans can visit http://www.idfpr.com/DFI/DFIComplaintForm.asp.

Mortgage and Rent

Foreclosure sales and evictions have been suspended for single family and multifamily home loans financed by Fannie Mae and Freddie Mac, and the department noted some may be eligible for forbearance or reduction of mortgage payments for up to 12 months.

Evictions and foreclosures are also suspended for 60 days on Federal Housing Authority single-family home loans and reverse mortgages for seniors.

Per IDFPR, affected homeowners or renters should contact their landlord and mortgage servicer immediately to learn about mortgage relief programs. Certified housing counselors through the U.S. Department of Housing and Urban Development can be found at http://www.HUD.gov.

The department also urges renters to contact legal assistance agencies, and they urged visiting https://www.carpls.org/client-services/ for free legal advice.

Veterans with questions about mortgage options can call the St. Paul VA Regional Office at 1-877-827-3702; the Illinois Attorney General’s Mortgage Helpline is available at 1-866-544-7151; and IDFPR can be called at 1-888-473-4858.

Student Loans

Interest rates on federal student loans held by the U.S. Department of Education have been reduced to 0 percent until Sept. 30, and repayment on those loans is suspended until the same date. Involuntary collection on federal student loans, including wage garnishments and offsets, will be suspended until that date as well. Credit reporting will take place as if the borrower were making timely payments.

Borrowers can find out if a loan is a federal student loan by visiting the Department of Education’s National Student Loan Data System at https://studentaid.gov/ or by calling 1-800-433-3243 or 1-800-730-8913 (TTD).

Borrowers are urged to contact their student loan servicer as quickly as possible if they are having trouble making payments. Those having trouble with their student loan servicers are encouraged to call the IDPFR Division of Banking at 217-785-2900 or the Attorney General’s Student Loan Helpline at 1-800-455-2456.

Banks and Credit Union Guidance

In its guidance for banks and credit unions, IDFPR “strongly urges” the entities “respond to borrowers affected by the current economic environment, such as small businesses, hourly workers, and independent contractors,” according to a news release.

IDFPR is encouraging all banks and credit unions to offer payment deferment at no cost while eliminating fees such as late payment, ATM usage and overdraft charges, and increasing daily ATM withdrawal and credit card limits.

The department also guides banks and credits unions to: provide new loans on favorable terms; ease restrictions on check cashing; alert customers to the heightened risk of scams; remind customers to contact their financial institutions before entering into unsolicited financial assistance programs; and ensure that consumers don’t experience service disruptions should the institutions close their offices.

If a lender closes its doors for health reasons, they must provide notice to IDFPR and provide reasonable ways to ensure borrowers can make payments to avoid delinquency, per the release.

Debt Collection

IDFPR noted that debt collection is not listed as essential businesses under Pritzker’s stay-at-home order, although debt collectors may continue to operate remotely.

The department is encouraging debt collectors and debt buyers to work with consumers to accommodate hardships, including by suspending collection activity for at least 60 days.