May 1, 2020 • 27 mins
Friday episodes are all about the effects of Covid-19 on your personal finances. There’s a lot of news and information out there, but we are distilling it down to specific takeaways that will allow you to weather this surreal health and financial crisis. In today’s timely episode we cover a lot of good news we’ve come across in the past week. We also address some of the impending changes to credit card limits as well as mortgage forbearance.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to How the Money. I'm Joel and I and Matt.
Today we're discussing credit card companies cutting limits and postponing
mortgage payments. This episode, we're gonna cover mortgages, specifically skipping
(00:30):
maybe paying your mortgage payments if you're in need. You know,
we're gonna get into the details of that. And not
everybody has an actual mortgage, but a lot of people
have credit cards, and so we're gonna cover some of
these changes that these credit card companies are making to
the lines of credit that they have out to folks
and how that specifically affects us as consumers. Yeah, man,
I think skipping a mortgage payment in a normal month
in under normal circumstances not a good idea, right defin
(00:52):
put you in a bad place. But for some people,
mortgage forbearance is a real issue and and they need
to know how to tackle it. They need to know
whether they qualify five and then how to go about
getting it, and then what they're entitled to. So we'll
talk about that later on in the episode. Yeah man,
that's right. So all right, Quarantine, this is like week
seven essentially, how you guys doing, By the way, Yeah,
I feel like we're holding up pretty well. At the beginning,
(01:12):
actually was tougher to transition the first two or three weeks,
trying to figure out school and routine and what things
were gonna look like for our family. But I feel
like we've actually settled in kind of nicely, and we're
actually starting to appreciate aspects of it a whole lot
more than we were right at the beginning. Originally, I
think we were not too comfortable with the new situation,
and now I think we've We've made some positive changes
(01:33):
kind of in our family dynamic, and one of the
biggest changes for us has been we've just become more
comfortable resting and being together and just enjoying time this
the five of us, and I think not that we
didn't do that before, but I think the lack of
being able to go and do and the lack of
things on our calendar has just made us feel way
more able to enjoy the downtime that we have and
(01:56):
just to do very little like a picnic outside or whatever,
just like the small things and enjoy those things. So
I think in that way, the seventh week of quarantine
has been really good. Like last weekend, we had the
best weekend we've had all quarantine. The weather was awesome.
We hung out outside, climb trees, all that kind of stuff,
and and it was it was great. Yeah. Could you
imagine like if this was all going on in the
(02:17):
middle of the winter, you know, that is probably the
only saving grace is the fact that the weather has
been nicer, we've been able to be outside, versus if
this was between like Thanksgiving, like around Christmas, you know,
beginning of January, when it was cold and raining literally
every single day at least down here in the southeast,
and the times when you want to see your family
and friends the most killing my gosh, Yeah, that's so true.
(02:37):
But yeah, I'm with you. We uh, except that with us,
like you mentioned how early on it was tough for us,
Like early on it was nice because it kind of
felt like a special treat, like it felt like a
snow day sort of thing, where it's like we had
an unprompted week off or two weeks off. But it
was after that where it started to feel kind of like, oh,
oh no, this is this is our real life now.
(02:57):
But the nice man, I'm glad to hear you guys
are doing well now. We're gonna dive into those topics
that we mentioned, but first, let's share some of that
good news. Let's get the good news. I love starting
there every week, and so yeah, this is where we
kind of share some of the highlights of positive news
that that's happening right now that in all likelihood some
of it affects you, and if it doesn't, it's just
fun to be able to talk about. So one grocery
(03:18):
store chain, matt Publix there in the southeast, based out
of Florida, they're buying excess food from farmers to give
to local food banks. I thought that was really cool, right,
This is such great news because there's so much milk
and fresh produce going to waste because of inflexible supply chains.
Right all that food was meant for restaurants and hotels,
many of which are closed right now. They've donated a
(03:39):
hundred fifty pounds of produce. Forty three thousand gallons of
milk were donated just in the first week alone of
this program. So it's really cool to see because I've
seen stories of farmers having to dump milk altogether, it
just goes to waste. In in the Netherlands, they plowed
under like millions of tulips. They just that's so crazy. Yeah,
(03:59):
the mark it was just gone, It evaporated for tulips,
and I'm like, send them all to my house. I
love tulips. But yes, do you imagine what the inside
of a tulip farmer's house look like, because if they
were just going to plow them under, you know, they're
just getting as many as possible, but they're probably just
completely sick of them, right, Yeah, I'm sure. But yeah,
it's cool to see a company like Public doing something
just really really helpful, like buying that food and donating
(04:22):
it to people in need. Yeah, that's such good news.
And it's good to see a company grocery store like
Public stepping up kind of filling the void, kind of
like stepping into that gap because of the problem is
our supply chains, right, Like, we live in such a
kind of complicated, interconnected world that it's difficult to to
change courses because of the size of our economy. Because
you know, but basically, once the trains left the station,
(04:44):
it's hard to reroute things, and so it does take
a little bit more nimbleness and that's not easy to do.
But I'm certainly glad to see a company like Public
stepping up. Yeah. I saw a story the other day
about this toilet paper company in New Mexico, and apparently
all their toilet paper os to office buildings and schools,
and so basically their toilet paper wasn't going anywhere for
(05:06):
for a little while, and while the grocery store shelves
were barren, they couldn't get rid of their toilet papers.
So what they did was they opened up their toilet
paper to people in the surrounding areas, and they basically
had people come up and pay for these giant bolt
toilet paper rolls. It would have been in heaven. Apparently
I could buy a whole Crates right. It's you know,
(05:26):
I'm into massive amount of toilet paper at one time,
and and people were lined up for miles to buy
the toilet paper. So it's kind of it's kind of
one of those crazy scenarios. It's it's not that there
isn't enough. It said, it's hard to redirect exactly into
the right place. Well, speaking of food, if you know
you are in a tougher situation, maybe you're looking for
free meals in particularly if you're looking for free meals
for kids, Like, there's a good chance that a local
(05:48):
school near you has resources for you, So check out
no kid hungry dot org. They've got this awesome searchable
map which has the days of the week as well
as the times that they have meals ready to go. Um. Obviously,
like you're going to pick those up in a bag.
But that's a fantastic resource for folks who may not
already be taking advantage of that. Yeah. Man, there's another
(06:10):
cool piece of good news I think we should bring up,
and there's the site called the Phoenix. It's a resource
for local small businesses to find funding that they need
right now. And we've talked a good bit about the
national p p P program that was set up to
basically help small businesses to get through this time. And
we've heard anecdotally from a few friends that they've been
able to get PPP funding, But everything I'm reading says
(06:32):
that a whole lot of small businesses just missed out
on the funding, and it looks like they're gonna miss
out on some of this second round of funding too,
sadly enough. And and so yeah, that program, while it's
been at least somewhat of a disaster. It hasn't worked
exactly like I think the authorities hoped it would. Well,
it's important for people to check and see if their
state has any local lending programs available for small businesses.
(06:55):
So there's more than just this federal program. So we'll
post a link to the Phoenix in our show. Now.
Some states have none, some states have a few, like Georgia,
and other states have a ton like California. There's thirty
six different programs there for small businesses to be able
to get funds to continue to run uh inexpensively. So yeah,
the Phoenix is is a helpful website for people to
to look into right now to get that money to
keep their business afloat. Some other good news the Gates Foundation,
(07:19):
which is run by Bill and Melinda Gates, part of them, actually,
Matt Emily and I just watched a three part documentary
about Bill Gates on Netflix. Three part. Then there's so
much good information about Bill Gates. Dude, He's done so
much to help other people. And the fact that the
Gates Foundation, for basically a decade now has done an
incredible amount of work and and I feel like, actually
(07:41):
they're poised at this point in time to make such
a dramatic impact, which is so awesome, like that they've
done so well and what they've pretty much focused on
up until now. I feel like it just fits in,
like dovetails so well with the current health crisis. Yeah. Yeah, Emilian,
I were saying, like, if it hadn't have been for
the last ten years of what they've been doing, he
just wouldn't really have his bearings to be able to
(08:03):
make an impact. But because he's focused on the eradication
of polio and he's just focused on all these other
health endeavors worldwide, he's uniquely poised to make an impact,
and in particular with the billions and billions of dollars
that he's got at his disposal too. So it's yeah,
it's cool to see like Bill Gates here for a
time like this to to help everybody. Well, the last
(08:23):
documentary I watched was about Scotch. So you're watching what
about Bill Gates. I learned a lot about Scotch, in
particular this one distiller who made a name for himself. Well, hey,
Scotch is worth considering as well. Man, I like Scotch.
I'll see too. Well, you know, we're talking about both Gates.
He also wrote this awesome opinion piece over in the
Financial Times last week, and he said that we've taken
(08:44):
an organization that was focused on HIV in malaria and
polio eradication and almost entirely shifted it to work on this.
This being COVID nineteen, This has the foundation's total attention.
Even our non health related work like higher education and
Kate through twelve is completely switched around to look at
how you facilitates online learning. So, I mean, I just
(09:05):
gotta say that I'm majorly thankful for his brain and
his philanthropic efforts right now. Yeah, for sure, and yeah
willing to a post that he wrote on his blog
to Matt called the first modern pandemic and his inside,
his research, his foundation, the way they've been able to
provide support right now, that's definitely good news. So they
think there's one bit of bad news that we have
to share them Matt on the show today. I don't
(09:26):
know if we've really been sharing any bad news, but
I saw this. I mean, all news related to COVID
nineteen is essentially bad, actually, yeah, which is why we
highlight the good news. Everything else is by default kind
of not good. But this is something that's not necessarily
health related. It's it's not part of the failure of
the federal government to put money in the hands of
people's pockets. Um. But this I saw this headline and
(09:48):
I definitely shed a little bit of a tear. It's
a millions of kegs of beer are going stale right now.
And I didn't realize too that when a keg of
beer goes stale, it's a major pain to get rid
of that beer. You can't just dump it down the train.
It's just so hard for brewers. I know that that.
You know, we love beer, Matt and and so the
brewers around the nation, especially the small brewers, are just
having such a tough time right now. So yeah, I
(10:09):
know we've done our best to support our local breweris,
but it just makes me sad that that some of
our favorite brewers their sales are down at the same
time they're getting these kigs of beer sent back to them,
and it's just a pain. It's it's really tough. So
it's a hard slog right now for for a whole
lot of people in the craft beer industry. Yeah, man,
it's a big deal here in the U. S, and
it's an even bigger deal in the UK, whereabout half
(10:29):
of all beer is enjoyed in public like in pubs,
bars places like that, compared to only about of beer
is consumed in bars in the US. But there's good
news though. Within that Wall Street Journal article, they featured
a pub owner who had made a website and he
offers delivery of his cask ales that he normally serves
there in his pub. Uh And so with that pivot,
(10:51):
essentially he is up to of his normal revenues pre
COVID nineteen, which I thought was super awesome, Like, what
what a great way it's to take like this old
you know, you picture an old English pub and it's
like there's no way that they're going to be able
to be flexible and pivot and find a way to
to meet the demand. But this guy is driving around
delivering these perishable ailes to his customers. Then I saw too,
(11:12):
there's a picture of him sitting on a stool, and
he brings along a stool that way he can sit
there and talk with him with some of these older
customers who want to chat. So he's essentially bringing the
pub to the people, which I loved. I feel like
that was such an amazing spirit that he is bringing
to you know, his business and keeping things alive during
these tough times. He mean completely, This guy sounds resilient,
(11:33):
and I think that the craft peer industry is is
going to be resilient, you know, and most of these crappers,
I hope, are going to make a good comeback, you know,
as we start to resume kind of a new normalcy
in our lives, as the economy begins to reopen, at
least to a certain degree. All Right, man, let's talk
about credit card issuers cutting limits for consumers, because I
think that's a really important thing that's going to affect
(11:54):
a lot of our listeners in the coming days, if
it hasn't already. So with a lot of people out
of work and a lot of Americans having almost no
money in savings, getting a credit line cut, that can
be like a huge punch to the gut. And what
I mean when I'm talking about getting a credit line cut,
Let's say you have a ten thousand dollar limit on
your credit card and you typically spend a thousand or
two thousand every month, and you pay it off every
(12:15):
month hopefully, well, your credit card company might send you
an email and say that your limit just got cut
to three thousand dollars. And in the case where you
needed to be able to use your credit card to
get pied, to buy groceries, whatever it is. Credit cards
are often a place where consumers turned as a place
usually of last resort, in order to be able to
keep paying the bills and keep food on the table.
But a lot of people are gonna find that harder
(12:35):
to do because of these credit limit cuts, So we
wanted people to be aware of that. The banks are
already getting poised for credit card debt ride offs, and
they're trying to prevent more financial difficulty on their end.
I understand that, but the credit line cuts are are
moves that happen without much warning, and they can really
adversely affect everybody who who's happening to and from the
banks and the credit card issuers perspective, like this all
(12:56):
makes sense, you know, like they know that more of
us are feeling the crunch due to income drying up
or maybe just being without work altogether. And you know,
when you don't have enough money, it's a last until
the end of the month, Like paying a credit card
is pretty much gonna be like last on your to
do list, you know, like like they get the they
get the whatever's left over, right, and it's unsecure debt.
So it's not like you're gonna lose your home if
(13:17):
you don't pay your credit card bill, which is which
is a good thing. But that's why people pay their
credit card bills last, and that's why the banks are worried. Right.
And so then with more of us maybe relying on
those credit cards to kind of pay for other expenses
and then not being able to pay those bills, you know,
a couple of months later, Like the banks, the credit
card issuers, they are the ones who are gonna be
stuck without bill. You know, these are gonna be charge
offs that they're gonna have to realize and incur, which
(13:39):
means them losing money. Yeah, for sure, man, And so man,
I think if anybody does get the notice that their
credit limit is being reduced, it's really important to do
this one particular thing. You should file an appeal with
your credit card issuer. And it doesn't mean that they'll
back off, that they'll raise your limit back up to
what it was, but you might at least get it
raised some and you might get it raised back up
to what it was, But filing an appeal is a
(14:01):
crucial step because if you petition the credit card company,
they just might listen. Right, and that credit limit, Man,
we've talked about this before, it's so important when it
comes to your credit score too, So this really could
adversely affect people's credit scores as well, which which has
many other impacts in your financial life. So yeah, trying
to find back on that and petition the credit card
company to reinstate your former credit card limit. I would
recommend doing that, and then also to just using your
(14:24):
credit card less if your limits lowered, just trying to
keep that utilization load. That's going to help keep your
score in a good spot as well. And if you
still currently have a good credit score, it might make
sense to go ahead and open up another credit card
for emergencies now if you're able to. Of course, you
can go to how the Money dot Com forward slash
credit cards and you can see some of our credit
card recommendations based on how you spend typically. And then
(14:47):
just make sure that you are using all the credit
cards you have now currently to keep them active and
to prevent your issuer from closing that accounts altogether. Some
of the different credit card companies say that they're reassessing,
you know, your credit worthiness and how some folks might
actually have increased limits, But we know that's really not
the case that the majority of folks are going to
(15:08):
see those limits decrease because in some cases they're going
to require additional proof of employments. They're gonna want to
see that you have income, and with so many of
us having our income cut drastically, that's only gonna lead
to lower limits. So we we we can read between
the lines their credit card companies. You can say one thing,
but we know what's really gonna happen. So we want
all of our listeners out there just to be aware
of that and to kind of take some of those
(15:29):
steps ahead of time proactively in order to be in
a strong position. Yeah for sure, Matt. All Right after
the break, we're going to talk about mortgage poor bearance,
and we're also going to talk about ordering non essential
goods right now? Is that something that we should be
doing or or not. We'll get to that stuff right
after the break. All right, man, we're back from the break,
(15:55):
and before we talk about skipping out on paying your
mortgage payment not always recommended. It's something that some people
might need to consider right now. Yeah, I mean, obviously
we're saying that jokingly, but we'll get to the details
on that. But you kind of mentioned this sort of
ethical question, so let's kind of slowed down the car
and uh and kind of hang out here for a
little bit. The question has been raised, like should we
be buying these not essential consumer goods online right now?
(16:17):
An argument is being made that it might be unethical
for employees to be forced to work in unsafe conditions,
you know, where they're fulfilling orders, whether it be in
warehouses or fulfillment centers, things like that. But yeah, man,
what are your thoughts on that. I think it's a
good question, and I do occasionally like wandering into the
that territory, the moral ethical quantis realm on this show,
but even though it's not something that we do frequently.
(16:38):
But yeah, I think right when COVID hit and none
of us really knew what to think, I did really
cut down on non essential purchases, and I think part
of that was just a reaction of who knows what's
going to happen in the economy, and I wanted to
keep my money in my bank account and not be
buying things that I didn't need. But at the same time,
I was also a little cognizant of people being putting
(17:00):
an unnecessarily unsafe position to make deliveries for things that
weren't necessary. So yeah, I completely understand that argument, but
I'm starting to kind of change my mindset on this one.
I think it's a really a balancing act, and we're
all having to start to make decisions that aren't necessarily easy,
like we're not sure whether we should be going back
to our jobs, like are we are we safe if
we go back to our jobs, or some people have
(17:21):
been continuing to work in an unsafe environment for this
whole time, if you work in a grocery store or
if you work in a hospital. Right, it's still important
for us to do the best we can to watch
out for our own personal health, the well being of
our family and the people around us. But as state
economies are starting to open up at different times, right,
at different paces, these decisions of how and when we
work and how and what we will buy become more
(17:43):
and more personal choices, Like that's the really left to
us to decide, And I think to the question of
what's essential is nuanced, like what items are essential and
what aren't. I mean, I think you kind of know
that you probably don't need that pair of shoes, and
I don't really need to be buying some new T
shirts or anything like that right now. Yeah, you still
have on same stinky T shirt the last time we recorded,
exactly exactly. Actually, you really do have the same shirt
(18:05):
on the last time we recorded. No, no, no, I've
got a new undershirt on. If the outer shirt that's
still good for another few wears, if you're Yeah, if
you wear an undershirts, which I haven't done it for
a while now, we don't need to be talking about that.
This is kind of weird, But however you have to
talk about right like, if you have an outer shirt,
I feel like you're good for several wears before it
starts getting kind of smelly, all right. I didn't mean
(18:26):
to throw you on the bus under the bus on
that one, but yeah, I think for for all of us,
it's kind of trying to figure it out. And I
think for all of us, we're all kind of having
to try to figure this out what our stances on
a lot of things that we've not had to consider before.
I think too, it's important to note a lot of
these businesses need the orders and and people need to
get back to work, even though it feels like a
(18:46):
hard thing to do, and and so yeah, I don't
really feel nearly as guilty about buying non essentials as
I did like four or five weeks ago. Yeah, man,
getting the economy kind of like back to where it
was before, right, Like, that's a big question that I
ask is, like another way to look at this is, Okay,
we're talking about warehouse workers, but what about like restaurant workers, right, Like,
we've been doing takeout since the beginning essentially in my opinion,
(19:07):
and like takeout is non essential. We can all go
to the grocery store and cook our own food. But
I think a lot of us saw as take out
as a way to stimulate the economy. Like we saw
that as a way to support some of these local
restaurants and businesses. Even though those people were in public,
surrounded by other co workers, basically they had a higher
risk of getting sick from you know, being out there,
(19:27):
and so like, in that regard, I completely agree with
what you're saying, though, Which is it comes down to
us as individuals, and I think it also comes down
to the businesses specifically to take care of their employees.
Like when I go to a restaurant in order take out,
like I trust that that employee is is being cared for.
Well if they weren't, you know, I think we're we
live in a time to where that employee could kind of,
(19:48):
you know, raise a red flag, and then at that
point it's up to us to kind of, you know,
vote with our money essentially as to whether or not
we're going to continue supporting that business or not. But
I mean so personally, like, I don't see anything wrong
with making non essential purchase is right now with around
our economy dependent on consumer spending, like the sooner we're
able to get back to some form of you know,
quote unquote normalcy, like the sooner we'll be able to
(20:10):
begin moving forward. And obviously, like there are a lot
of folks who don't have the ability to make their
normal consumer purchases, but of those who do, I don't
think there are any ethical questions when it comes to
purchasing non essentials. And of course, if you do feel
that it's not the right thing to do, you know,
then by all means abstain from from making those purchases
Like that is where it comes down to the individual
(20:31):
to make up their own mind and to you know,
act accordingly. Yeah, so, Matt, we actually just recently bought
a couple art prints from an artist that we really
like and that are particular artist is trying to be
cognizant of the delivery issues and the health concerns of
delivery workers, and so they said we're going to delay
actually shipping the prints until mid May. I'm totally fine
with that. I think that business is making a good
(20:53):
decision for themselves and for the people, you know, in
their community, and so I think that's like a really
good place for it to happen. And business is still happening,
the transaction is happening. You're still supporting that business, but
let's eliminate some of the unnecessary risks. Yeah, exactly. I
like that. That's real thoughtful And I don't mind waiting
to get my cool folk car prince and filled in
mid May. All right, Let's move on, Matt, to mortgage forbearance,
(21:14):
because that's another question that's on a lot of people's mind,
and the amount of people in our country. Requesting mortgage
forbearance has gone up in in the last few weeks.
It's something that more and more people are having to
consider sadly, And so you might be listening right now
and you've had to make that difficult decision to not
send a mortgage payment today because today is the first
of the month. So if you are in the position
of not being able to pay your mortgage provider, let's
(21:36):
talk about forbearance, how you go about getting it, and
how it's going to affect you, because these are the
kind of questions Matt that are on people's minds right now,
and especially right now at the beginning of the month,
because this is where it all gets real. Yeah, man,
first of the month, that's what the mortgage payment typically
is due. Well, do the f h f A, which
is the Federal Housing Finance Agency, They clarify some rules
just this week, actually earlier this week about forbearance. Some lenders,
(22:00):
some mortgage services, they were allowing borrowers to forego payments
for a certain period of time, maybe like three or
six months, but then they were forcing a balloon payment
for all of the misspayments at the end of that term.
That's a crumpy bill to get. Yeah, seriously, it's like, Okay,
we knew you couldn't afford it then, and so we're
gonna just kind of pinch off that hose and not
the end you're going to be forced to to pay
all of that back. Oh, by the way, wild economy
(22:22):
is struggling and you're probably not getting paid nearly as much, right,
how does that help anybody? Not helpful at all of me.
So again the f h f A, they clarify this,
and they stated that borrowers who are in forbearance with
a Fannie May or a Freddie Mac backed mortgage, they
are not going to be required to repay that miss
payment in that massive lump sum. Yeah. So if you've
been told that by your mortgage service from old news, yeah,
(22:43):
call him back and be like, what's up. I can't
pay a lumps on at the end of this three
or six months or however long that forbearance term is.
Those payments should be tacked on to the end of
the loan. So, yeah, you can go to the Fannie
Main Freddy Mac websites entering your in phot to see
if you have a mortgage that is federally backed by
one of those age sees, and we'll lead directly to
those sites in the show notes. You could also directly
(23:04):
contact your mortgage servicer to find out as well. So
if your mortgage is not backed by Fannie or Freddie,
you should still ask your mortgage servicer to abide by
these rules. They don't have to, but you should ask.
And another important thing I think for for folks to
know is that they should file a complaint with the
Consumer Financial Protection Bureau at Consumer Finance dot gov. If
your mortgage servicer is treating you poorly, that's the perfect
(23:27):
place to file a complaint. Oftentimes the Consumer Financial Protection
Bureau gets into action really quickly. Bell holler at your
mortgage servicer and raise a racket on your behalf. And
many times they start getting in line and treating you
better right after something like that happens. And yeah, and
if you're having a hard time, maybe you know, being
comfortable with the fact of asking for a discount. Listen
back to episode eighteen. This is an oldie, but we
(23:48):
had an episode called the Art of Asking for a Discount,
And in that episode we talked folks through, you know,
a way that we thought was polites but also effective
as well. So yeah, listen back to that one. I
still love asking for a discount my fa of things
to do in life when of your past time. And
what we think this will end up looking like for
a lot of folks is that those miss payments will
be tacked onto the end of the loan. So for example,
(24:09):
if you had a thirty year mortgage that originally would
have been over, say in March of then let's say
you missed four months of mortgage payments this year due
to you know, hardship and forbearance. Well, then in that case,
your mortgage will actually extend to July. They're just going
to attack those four months onto the end. And so
different mortgage services they're going to have different approaches and programs.
(24:31):
But the reason that we're talking about this now is
is for you to be aware that those programs even
exist because for a lot of people, this is gonna
be a serious lifeline while we're having such a difficult
time when it comes to our our money these days. Yeah, man,
it's important to note to that we're not sure how
these mortgage service providers are going to approach your credit
when you ask for forbearance, and there hasn't been any
(24:51):
clarification there. So some people might have a credit ding
by getting forbearance, but it's still the right move to
make if that is what keeps you afloat, if not
having to make a mortgage payment for the next six
months is what's gonna help you get through, and so yeah,
but I hate that we don't know that, and I
wish that we could have some clarification there too, that
the mortgage holders would not be able to adversely affect
(25:12):
your credit score just because you ask for forbearance. That's
not cool. And on the note of asking, I think
it's another thing that you can ask your your mortgage
service is to not report to your credit bureau about
this forbearance because obviously it comes on the heels of
a pandemic, something utterly unpredictable. But even with that being said,
even if they say yes, we are going to report it,
remember what your credit score is for. Like, it's to use, right,
(25:33):
It's a tool. It's not a tool for you to
keep shining and perfect and pristine to mount on your wall,
like it's a tool to like take outside and digging
the dirt, you know, Like this is a tool that
you want to use It's just important to note that
we don't want to over prioritize having a pristine and
perfect credit score. You know that we that we never
touch or doing or take out of the driveway because
we don't want, you know, the neighborhood kids to kind
(25:53):
of bump into it with their car like that kind
of thing, those pesky kids. Yeah, you don't want that
to happen, right, well, I think Matt two, it's important
to about tenants real quick based on on the heels
of mortgage forebearance, and sadly, there's not much we can
say in the area of relief for for tenants who
are having a tough time paying their rent. It comes
down so much to your individual situation talking to your
landlord and trying to work through this. But knowing about
(26:16):
mortgage forbearance could help you talk to your landlord about
having extra time to pay your rent, because if they
have extra time to pay their mortgage, hopefully they can
be lenient with you at the same time and offer
you extra time to pay. So, yeah, this is definitely
something worth bringing up, worth adding into the conversation if
you're having trouble or you're struggling to pay the rent
then bringing this up and asking your landlord point blank,
like do you have access to mortgage forbearance? Would that
(26:38):
allow you to help me give me a break during
this time while I'm getting back on my feet, And eventually,
of course I will pay you, but but it's just
gonna take extra time. And hopefully this mortgage forebearance gives
you the ability to then in turn give me a
little more flexibility with with the rent payments. Yeah, you
as a renter, like you can be a resource to
your landlord, which is super cool. So j we mentioned
those websites to Fannie May and Freddie Mac will actually
(27:00):
link directly to the pages on their websites where you
can literally look up your your property and to see
if it's federally backed. And we'll also have the links
in there as well if you're looking at going ahead
and securing a new credit card to have on hand
just in case, and you can find those at how
to money dot com. Yeah, buddy, all right, I always
love these Friday episodes. A lot of information to get
out there, a lot of good information to at the beginning.
(27:21):
So all right, well, we'll keep punkering down and Matt
until next time. Best friends out, best friends out,
Welcome to How the Money. I'm Joel and I and Matt.
Today we're discussing credit card companies cutting limits and postponing
mortgage payments. This episode, we're gonna cover mortgages, specifically skipping
(00:30):
maybe paying your mortgage payments if you're in need. You know,
we're gonna get into the details of that. And not
everybody has an actual mortgage, but a lot of people
have credit cards, and so we're gonna cover some of
these changes that these credit card companies are making to
the lines of credit that they have out to folks
and how that specifically affects us as consumers. Yeah, man,
I think skipping a mortgage payment in a normal month
in under normal circumstances not a good idea, right defin
(00:52):
put you in a bad place. But for some people,
mortgage forbearance is a real issue and and they need
to know how to tackle it. They need to know
whether they qualify five and then how to go about
getting it, and then what they're entitled to. So we'll
talk about that later on in the episode. Yeah man,
that's right. So all right, Quarantine, this is like week
seven essentially, how you guys doing, By the way, Yeah,
I feel like we're holding up pretty well. At the beginning,
(01:12):
actually was tougher to transition the first two or three weeks,
trying to figure out school and routine and what things
were gonna look like for our family. But I feel
like we've actually settled in kind of nicely, and we're
actually starting to appreciate aspects of it a whole lot
more than we were right at the beginning. Originally, I
think we were not too comfortable with the new situation,
and now I think we've We've made some positive changes
(01:33):
kind of in our family dynamic, and one of the
biggest changes for us has been we've just become more
comfortable resting and being together and just enjoying time this
the five of us, and I think not that we
didn't do that before, but I think the lack of
being able to go and do and the lack of
things on our calendar has just made us feel way
more able to enjoy the downtime that we have and
(01:56):
just to do very little like a picnic outside or whatever,
just like the small things and enjoy those things. So
I think in that way, the seventh week of quarantine
has been really good. Like last weekend, we had the
best weekend we've had all quarantine. The weather was awesome.
We hung out outside, climb trees, all that kind of stuff,
and and it was it was great. Yeah. Could you
imagine like if this was all going on in the
(02:17):
middle of the winter, you know, that is probably the
only saving grace is the fact that the weather has
been nicer, we've been able to be outside, versus if
this was between like Thanksgiving, like around Christmas, you know,
beginning of January, when it was cold and raining literally
every single day at least down here in the southeast,
and the times when you want to see your family
and friends the most killing my gosh, Yeah, that's so true.
(02:37):
But yeah, I'm with you. We uh, except that with us,
like you mentioned how early on it was tough for us,
Like early on it was nice because it kind of
felt like a special treat, like it felt like a
snow day sort of thing, where it's like we had
an unprompted week off or two weeks off. But it
was after that where it started to feel kind of like, oh,
oh no, this is this is our real life now.
(02:57):
But the nice man, I'm glad to hear you guys
are doing well now. We're gonna dive into those topics
that we mentioned, but first, let's share some of that
good news. Let's get the good news. I love starting
there every week, and so yeah, this is where we
kind of share some of the highlights of positive news
that that's happening right now that in all likelihood some
of it affects you, and if it doesn't, it's just
fun to be able to talk about. So one grocery
(03:18):
store chain, matt Publix there in the southeast, based out
of Florida, they're buying excess food from farmers to give
to local food banks. I thought that was really cool, right,
This is such great news because there's so much milk
and fresh produce going to waste because of inflexible supply chains.
Right all that food was meant for restaurants and hotels,
many of which are closed right now. They've donated a
(03:39):
hundred fifty pounds of produce. Forty three thousand gallons of
milk were donated just in the first week alone of
this program. So it's really cool to see because I've
seen stories of farmers having to dump milk altogether, it
just goes to waste. In in the Netherlands, they plowed
under like millions of tulips. They just that's so crazy. Yeah,
(03:59):
the mark it was just gone, It evaporated for tulips,
and I'm like, send them all to my house. I
love tulips. But yes, do you imagine what the inside
of a tulip farmer's house look like, because if they
were just going to plow them under, you know, they're
just getting as many as possible, but they're probably just
completely sick of them, right, Yeah, I'm sure. But yeah,
it's cool to see a company like Public doing something
just really really helpful, like buying that food and donating
(04:22):
it to people in need. Yeah, that's such good news.
And it's good to see a company grocery store like
Public stepping up kind of filling the void, kind of
like stepping into that gap because of the problem is
our supply chains, right, Like, we live in such a
kind of complicated, interconnected world that it's difficult to to
change courses because of the size of our economy. Because
you know, but basically, once the trains left the station,
(04:44):
it's hard to reroute things, and so it does take
a little bit more nimbleness and that's not easy to do.
But I'm certainly glad to see a company like Public
stepping up. Yeah. I saw a story the other day
about this toilet paper company in New Mexico, and apparently
all their toilet paper os to office buildings and schools,
and so basically their toilet paper wasn't going anywhere for
(05:06):
for a little while, and while the grocery store shelves
were barren, they couldn't get rid of their toilet papers.
So what they did was they opened up their toilet
paper to people in the surrounding areas, and they basically
had people come up and pay for these giant bolt
toilet paper rolls. It would have been in heaven. Apparently
I could buy a whole Crates right. It's you know,
(05:26):
I'm into massive amount of toilet paper at one time,
and and people were lined up for miles to buy
the toilet paper. So it's kind of it's kind of
one of those crazy scenarios. It's it's not that there
isn't enough. It said, it's hard to redirect exactly into
the right place. Well, speaking of food, if you know
you are in a tougher situation, maybe you're looking for
free meals in particularly if you're looking for free meals
for kids, Like, there's a good chance that a local
(05:48):
school near you has resources for you, So check out
no kid hungry dot org. They've got this awesome searchable
map which has the days of the week as well
as the times that they have meals ready to go. Um. Obviously,
like you're going to pick those up in a bag.
But that's a fantastic resource for folks who may not
already be taking advantage of that. Yeah. Man, there's another
(06:10):
cool piece of good news I think we should bring up,
and there's the site called the Phoenix. It's a resource
for local small businesses to find funding that they need
right now. And we've talked a good bit about the
national p p P program that was set up to
basically help small businesses to get through this time. And
we've heard anecdotally from a few friends that they've been
able to get PPP funding, But everything I'm reading says
(06:32):
that a whole lot of small businesses just missed out
on the funding, and it looks like they're gonna miss
out on some of this second round of funding too,
sadly enough. And and so yeah, that program, while it's
been at least somewhat of a disaster. It hasn't worked
exactly like I think the authorities hoped it would. Well,
it's important for people to check and see if their
state has any local lending programs available for small businesses.
(06:55):
So there's more than just this federal program. So we'll
post a link to the Phoenix in our show. Now.
Some states have none, some states have a few, like Georgia,
and other states have a ton like California. There's thirty
six different programs there for small businesses to be able
to get funds to continue to run uh inexpensively. So yeah,
the Phoenix is is a helpful website for people to
to look into right now to get that money to
keep their business afloat. Some other good news the Gates Foundation,
(07:19):
which is run by Bill and Melinda Gates, part of them, actually,
Matt Emily and I just watched a three part documentary
about Bill Gates on Netflix. Three part. Then there's so
much good information about Bill Gates. Dude, He's done so
much to help other people. And the fact that the
Gates Foundation, for basically a decade now has done an
incredible amount of work and and I feel like, actually
(07:41):
they're poised at this point in time to make such
a dramatic impact, which is so awesome, like that they've
done so well and what they've pretty much focused on
up until now. I feel like it just fits in,
like dovetails so well with the current health crisis. Yeah. Yeah, Emilian,
I were saying, like, if it hadn't have been for
the last ten years of what they've been doing, he
just wouldn't really have his bearings to be able to
(08:03):
make an impact. But because he's focused on the eradication
of polio and he's just focused on all these other
health endeavors worldwide, he's uniquely poised to make an impact,
and in particular with the billions and billions of dollars
that he's got at his disposal too. So it's yeah,
it's cool to see like Bill Gates here for a
time like this to to help everybody. Well, the last
(08:23):
documentary I watched was about Scotch. So you're watching what
about Bill Gates. I learned a lot about Scotch, in
particular this one distiller who made a name for himself. Well, hey,
Scotch is worth considering as well. Man, I like Scotch.
I'll see too. Well, you know, we're talking about both Gates.
He also wrote this awesome opinion piece over in the
Financial Times last week, and he said that we've taken
(08:44):
an organization that was focused on HIV in malaria and
polio eradication and almost entirely shifted it to work on this.
This being COVID nineteen, This has the foundation's total attention.
Even our non health related work like higher education and
Kate through twelve is completely switched around to look at
how you facilitates online learning. So, I mean, I just
(09:05):
gotta say that I'm majorly thankful for his brain and
his philanthropic efforts right now. Yeah, for sure, and yeah
willing to a post that he wrote on his blog
to Matt called the first modern pandemic and his inside,
his research, his foundation, the way they've been able to
provide support right now, that's definitely good news. So they
think there's one bit of bad news that we have
to share them Matt on the show today. I don't
(09:26):
know if we've really been sharing any bad news, but
I saw this. I mean, all news related to COVID
nineteen is essentially bad, actually, yeah, which is why we
highlight the good news. Everything else is by default kind
of not good. But this is something that's not necessarily
health related. It's it's not part of the failure of
the federal government to put money in the hands of
people's pockets. Um. But this I saw this headline and
(09:48):
I definitely shed a little bit of a tear. It's
a millions of kegs of beer are going stale right now.
And I didn't realize too that when a keg of
beer goes stale, it's a major pain to get rid
of that beer. You can't just dump it down the train.
It's just so hard for brewers. I know that that.
You know, we love beer, Matt and and so the
brewers around the nation, especially the small brewers, are just
having such a tough time right now. So yeah, I
(10:09):
know we've done our best to support our local breweris,
but it just makes me sad that that some of
our favorite brewers their sales are down at the same
time they're getting these kigs of beer sent back to them,
and it's just a pain. It's it's really tough. So
it's a hard slog right now for for a whole
lot of people in the craft beer industry. Yeah, man,
it's a big deal here in the U. S, and
it's an even bigger deal in the UK, whereabout half
(10:29):
of all beer is enjoyed in public like in pubs,
bars places like that, compared to only about of beer
is consumed in bars in the US. But there's good
news though. Within that Wall Street Journal article, they featured
a pub owner who had made a website and he
offers delivery of his cask ales that he normally serves
there in his pub. Uh And so with that pivot,
(10:51):
essentially he is up to of his normal revenues pre
COVID nineteen, which I thought was super awesome, Like, what
what a great way it's to take like this old
you know, you picture an old English pub and it's
like there's no way that they're going to be able
to be flexible and pivot and find a way to
to meet the demand. But this guy is driving around
delivering these perishable ailes to his customers. Then I saw too,
(11:12):
there's a picture of him sitting on a stool, and
he brings along a stool that way he can sit
there and talk with him with some of these older
customers who want to chat. So he's essentially bringing the
pub to the people, which I loved. I feel like
that was such an amazing spirit that he is bringing
to you know, his business and keeping things alive during
these tough times. He mean completely, This guy sounds resilient,
(11:33):
and I think that the craft peer industry is is
going to be resilient, you know, and most of these crappers,
I hope, are going to make a good comeback, you know,
as we start to resume kind of a new normalcy
in our lives, as the economy begins to reopen, at
least to a certain degree. All Right, man, let's talk
about credit card issuers cutting limits for consumers, because I
think that's a really important thing that's going to affect
(11:54):
a lot of our listeners in the coming days, if
it hasn't already. So with a lot of people out
of work and a lot of Americans having almost no
money in savings, getting a credit line cut, that can
be like a huge punch to the gut. And what
I mean when I'm talking about getting a credit line cut,
Let's say you have a ten thousand dollar limit on
your credit card and you typically spend a thousand or
two thousand every month, and you pay it off every
(12:15):
month hopefully, well, your credit card company might send you
an email and say that your limit just got cut
to three thousand dollars. And in the case where you
needed to be able to use your credit card to
get pied, to buy groceries, whatever it is. Credit cards
are often a place where consumers turned as a place
usually of last resort, in order to be able to
keep paying the bills and keep food on the table.
But a lot of people are gonna find that harder
(12:35):
to do because of these credit limit cuts, So we
wanted people to be aware of that. The banks are
already getting poised for credit card debt ride offs, and
they're trying to prevent more financial difficulty on their end.
I understand that, but the credit line cuts are are
moves that happen without much warning, and they can really
adversely affect everybody who who's happening to and from the
banks and the credit card issuers perspective, like this all
(12:56):
makes sense, you know, like they know that more of
us are feeling the crunch due to income drying up
or maybe just being without work altogether. And you know,
when you don't have enough money, it's a last until
the end of the month, Like paying a credit card
is pretty much gonna be like last on your to
do list, you know, like like they get the they
get the whatever's left over, right, and it's unsecure debt.
So it's not like you're gonna lose your home if
(13:17):
you don't pay your credit card bill, which is which
is a good thing. But that's why people pay their
credit card bills last, and that's why the banks are worried. Right.
And so then with more of us maybe relying on
those credit cards to kind of pay for other expenses
and then not being able to pay those bills, you know,
a couple of months later, Like the banks, the credit
card issuers, they are the ones who are gonna be
stuck without bill. You know, these are gonna be charge
offs that they're gonna have to realize and incur, which
(13:39):
means them losing money. Yeah, for sure, man, And so man,
I think if anybody does get the notice that their
credit limit is being reduced, it's really important to do
this one particular thing. You should file an appeal with
your credit card issuer. And it doesn't mean that they'll
back off, that they'll raise your limit back up to
what it was, but you might at least get it
raised some and you might get it raised back up
to what it was, But filing an appeal is a
(14:01):
crucial step because if you petition the credit card company,
they just might listen. Right, and that credit limit, Man,
we've talked about this before, it's so important when it
comes to your credit score too, So this really could
adversely affect people's credit scores as well, which which has
many other impacts in your financial life. So yeah, trying
to find back on that and petition the credit card
company to reinstate your former credit card limit. I would
recommend doing that, and then also to just using your
(14:24):
credit card less if your limits lowered, just trying to
keep that utilization load. That's going to help keep your
score in a good spot as well. And if you
still currently have a good credit score, it might make
sense to go ahead and open up another credit card
for emergencies now if you're able to. Of course, you
can go to how the Money dot Com forward slash
credit cards and you can see some of our credit
card recommendations based on how you spend typically. And then
(14:47):
just make sure that you are using all the credit
cards you have now currently to keep them active and
to prevent your issuer from closing that accounts altogether. Some
of the different credit card companies say that they're reassessing,
you know, your credit worthiness and how some folks might
actually have increased limits, But we know that's really not
the case that the majority of folks are going to
(15:08):
see those limits decrease because in some cases they're going
to require additional proof of employments. They're gonna want to
see that you have income, and with so many of
us having our income cut drastically, that's only gonna lead
to lower limits. So we we we can read between
the lines their credit card companies. You can say one thing,
but we know what's really gonna happen. So we want
all of our listeners out there just to be aware
of that and to kind of take some of those
(15:29):
steps ahead of time proactively in order to be in
a strong position. Yeah for sure, Matt. All Right after
the break, we're going to talk about mortgage poor bearance,
and we're also going to talk about ordering non essential
goods right now? Is that something that we should be
doing or or not. We'll get to that stuff right
after the break. All right, man, we're back from the break,
(15:55):
and before we talk about skipping out on paying your
mortgage payment not always recommended. It's something that some people
might need to consider right now. Yeah, I mean, obviously
we're saying that jokingly, but we'll get to the details
on that. But you kind of mentioned this sort of
ethical question, so let's kind of slowed down the car
and uh and kind of hang out here for a
little bit. The question has been raised, like should we
be buying these not essential consumer goods online right now?
(16:17):
An argument is being made that it might be unethical
for employees to be forced to work in unsafe conditions,
you know, where they're fulfilling orders, whether it be in
warehouses or fulfillment centers, things like that. But yeah, man,
what are your thoughts on that. I think it's a
good question, and I do occasionally like wandering into the
that territory, the moral ethical quantis realm on this show,
but even though it's not something that we do frequently.
(16:38):
But yeah, I think right when COVID hit and none
of us really knew what to think, I did really
cut down on non essential purchases, and I think part
of that was just a reaction of who knows what's
going to happen in the economy, and I wanted to
keep my money in my bank account and not be
buying things that I didn't need. But at the same time,
I was also a little cognizant of people being putting
(17:00):
an unnecessarily unsafe position to make deliveries for things that
weren't necessary. So yeah, I completely understand that argument, but
I'm starting to kind of change my mindset on this one.
I think it's a really a balancing act, and we're
all having to start to make decisions that aren't necessarily easy,
like we're not sure whether we should be going back
to our jobs, like are we are we safe if
we go back to our jobs, or some people have
(17:21):
been continuing to work in an unsafe environment for this
whole time, if you work in a grocery store or
if you work in a hospital. Right, it's still important
for us to do the best we can to watch
out for our own personal health, the well being of
our family and the people around us. But as state
economies are starting to open up at different times, right,
at different paces, these decisions of how and when we
work and how and what we will buy become more
(17:43):
and more personal choices, Like that's the really left to
us to decide, And I think to the question of
what's essential is nuanced, like what items are essential and
what aren't. I mean, I think you kind of know
that you probably don't need that pair of shoes, and
I don't really need to be buying some new T
shirts or anything like that right now. Yeah, you still
have on same stinky T shirt the last time we recorded,
exactly exactly. Actually, you really do have the same shirt
(18:05):
on the last time we recorded. No, no, no, I've
got a new undershirt on. If the outer shirt that's
still good for another few wears, if you're Yeah, if
you wear an undershirts, which I haven't done it for
a while now, we don't need to be talking about that.
This is kind of weird, But however you have to
talk about right like, if you have an outer shirt,
I feel like you're good for several wears before it
starts getting kind of smelly, all right. I didn't mean
(18:26):
to throw you on the bus under the bus on
that one, but yeah, I think for for all of us,
it's kind of trying to figure it out. And I
think for all of us, we're all kind of having
to try to figure this out what our stances on
a lot of things that we've not had to consider before.
I think too, it's important to note a lot of
these businesses need the orders and and people need to
get back to work, even though it feels like a
(18:46):
hard thing to do, and and so yeah, I don't
really feel nearly as guilty about buying non essentials as
I did like four or five weeks ago. Yeah, man,
getting the economy kind of like back to where it
was before, right, Like, that's a big question that I
ask is, like another way to look at this is, Okay,
we're talking about warehouse workers, but what about like restaurant workers, right, Like,
we've been doing takeout since the beginning essentially in my opinion,
(19:07):
and like takeout is non essential. We can all go
to the grocery store and cook our own food. But
I think a lot of us saw as take out
as a way to stimulate the economy. Like we saw
that as a way to support some of these local
restaurants and businesses. Even though those people were in public,
surrounded by other co workers, basically they had a higher
risk of getting sick from you know, being out there,
(19:27):
and so like, in that regard, I completely agree with
what you're saying, though, Which is it comes down to
us as individuals, and I think it also comes down
to the businesses specifically to take care of their employees.
Like when I go to a restaurant in order take out,
like I trust that that employee is is being cared for.
Well if they weren't, you know, I think we're we
live in a time to where that employee could kind of,
(19:48):
you know, raise a red flag, and then at that
point it's up to us to kind of, you know,
vote with our money essentially as to whether or not
we're going to continue supporting that business or not. But
I mean so personally, like, I don't see anything wrong
with making non essential purchase is right now with around
our economy dependent on consumer spending, like the sooner we're
able to get back to some form of you know,
quote unquote normalcy, like the sooner we'll be able to
(20:10):
begin moving forward. And obviously, like there are a lot
of folks who don't have the ability to make their
normal consumer purchases, but of those who do, I don't
think there are any ethical questions when it comes to
purchasing non essentials. And of course, if you do feel
that it's not the right thing to do, you know,
then by all means abstain from from making those purchases
Like that is where it comes down to the individual
(20:31):
to make up their own mind and to you know,
act accordingly. Yeah, so, Matt, we actually just recently bought
a couple art prints from an artist that we really
like and that are particular artist is trying to be
cognizant of the delivery issues and the health concerns of
delivery workers, and so they said we're going to delay
actually shipping the prints until mid May. I'm totally fine
with that. I think that business is making a good
(20:53):
decision for themselves and for the people, you know, in
their community, and so I think that's like a really
good place for it to happen. And business is still happening,
the transaction is happening. You're still supporting that business, but
let's eliminate some of the unnecessary risks. Yeah, exactly. I
like that. That's real thoughtful And I don't mind waiting
to get my cool folk car prince and filled in
mid May. All right, Let's move on, Matt, to mortgage forbearance,
(21:14):
because that's another question that's on a lot of people's mind,
and the amount of people in our country. Requesting mortgage
forbearance has gone up in in the last few weeks.
It's something that more and more people are having to
consider sadly, And so you might be listening right now
and you've had to make that difficult decision to not
send a mortgage payment today because today is the first
of the month. So if you are in the position
of not being able to pay your mortgage provider, let's
(21:36):
talk about forbearance, how you go about getting it, and
how it's going to affect you, because these are the
kind of questions Matt that are on people's minds right now,
and especially right now at the beginning of the month,
because this is where it all gets real. Yeah, man,
first of the month, that's what the mortgage payment typically
is due. Well, do the f h f A, which
is the Federal Housing Finance Agency, They clarify some rules
just this week, actually earlier this week about forbearance. Some lenders,
(22:00):
some mortgage services, they were allowing borrowers to forego payments
for a certain period of time, maybe like three or
six months, but then they were forcing a balloon payment
for all of the misspayments at the end of that term.
That's a crumpy bill to get. Yeah, seriously, it's like, Okay,
we knew you couldn't afford it then, and so we're
gonna just kind of pinch off that hose and not
the end you're going to be forced to to pay
all of that back. Oh, by the way, wild economy
(22:22):
is struggling and you're probably not getting paid nearly as much, right,
how does that help anybody? Not helpful at all of me.
So again the f h f A, they clarify this,
and they stated that borrowers who are in forbearance with
a Fannie May or a Freddie Mac backed mortgage, they
are not going to be required to repay that miss
payment in that massive lump sum. Yeah. So if you've
been told that by your mortgage service from old news, yeah,
(22:43):
call him back and be like, what's up. I can't
pay a lumps on at the end of this three
or six months or however long that forbearance term is.
Those payments should be tacked on to the end of
the loan. So, yeah, you can go to the Fannie
Main Freddy Mac websites entering your in phot to see
if you have a mortgage that is federally backed by
one of those age sees, and we'll lead directly to
those sites in the show notes. You could also directly
(23:04):
contact your mortgage servicer to find out as well. So
if your mortgage is not backed by Fannie or Freddie,
you should still ask your mortgage servicer to abide by
these rules. They don't have to, but you should ask.
And another important thing I think for for folks to
know is that they should file a complaint with the
Consumer Financial Protection Bureau at Consumer Finance dot gov. If
your mortgage servicer is treating you poorly, that's the perfect
(23:27):
place to file a complaint. Oftentimes the Consumer Financial Protection
Bureau gets into action really quickly. Bell holler at your
mortgage servicer and raise a racket on your behalf. And
many times they start getting in line and treating you
better right after something like that happens. And yeah, and
if you're having a hard time, maybe you know, being
comfortable with the fact of asking for a discount. Listen
back to episode eighteen. This is an oldie, but we
(23:48):
had an episode called the Art of Asking for a Discount,
And in that episode we talked folks through, you know,
a way that we thought was polites but also effective
as well. So yeah, listen back to that one. I
still love asking for a discount my fa of things
to do in life when of your past time. And
what we think this will end up looking like for
a lot of folks is that those miss payments will
be tacked onto the end of the loan. So for example,
(24:09):
if you had a thirty year mortgage that originally would
have been over, say in March of then let's say
you missed four months of mortgage payments this year due
to you know, hardship and forbearance. Well, then in that case,
your mortgage will actually extend to July. They're just going
to attack those four months onto the end. And so
different mortgage services they're going to have different approaches and programs.
(24:31):
But the reason that we're talking about this now is
is for you to be aware that those programs even
exist because for a lot of people, this is gonna
be a serious lifeline while we're having such a difficult
time when it comes to our our money these days. Yeah, man,
it's important to note to that we're not sure how
these mortgage service providers are going to approach your credit
when you ask for forbearance, and there hasn't been any
(24:51):
clarification there. So some people might have a credit ding
by getting forbearance, but it's still the right move to
make if that is what keeps you afloat, if not
having to make a mortgage payment for the next six
months is what's gonna help you get through, and so yeah,
but I hate that we don't know that, and I
wish that we could have some clarification there too, that
the mortgage holders would not be able to adversely affect
(25:12):
your credit score just because you ask for forbearance. That's
not cool. And on the note of asking, I think
it's another thing that you can ask your your mortgage
service is to not report to your credit bureau about
this forbearance because obviously it comes on the heels of
a pandemic, something utterly unpredictable. But even with that being said,
even if they say yes, we are going to report it,
remember what your credit score is for. Like, it's to use, right,
(25:33):
It's a tool. It's not a tool for you to
keep shining and perfect and pristine to mount on your wall,
like it's a tool to like take outside and digging
the dirt, you know, Like this is a tool that
you want to use It's just important to note that
we don't want to over prioritize having a pristine and
perfect credit score. You know that we that we never
touch or doing or take out of the driveway because
we don't want, you know, the neighborhood kids to kind
(25:53):
of bump into it with their car like that kind
of thing, those pesky kids. Yeah, you don't want that
to happen, right, well, I think Matt two, it's important
to about tenants real quick based on on the heels
of mortgage forebearance, and sadly, there's not much we can
say in the area of relief for for tenants who
are having a tough time paying their rent. It comes
down so much to your individual situation talking to your
landlord and trying to work through this. But knowing about
(26:16):
mortgage forbearance could help you talk to your landlord about
having extra time to pay your rent, because if they
have extra time to pay their mortgage, hopefully they can
be lenient with you at the same time and offer
you extra time to pay. So, yeah, this is definitely
something worth bringing up, worth adding into the conversation if
you're having trouble or you're struggling to pay the rent
then bringing this up and asking your landlord point blank,
like do you have access to mortgage forbearance? Would that
(26:38):
allow you to help me give me a break during
this time while I'm getting back on my feet, And eventually,
of course I will pay you, but but it's just
gonna take extra time. And hopefully this mortgage forebearance gives
you the ability to then in turn give me a
little more flexibility with with the rent payments. Yeah, you
as a renter, like you can be a resource to
your landlord, which is super cool. So j we mentioned
those websites to Fannie May and Freddie Mac will actually
(27:00):
link directly to the pages on their websites where you
can literally look up your your property and to see
if it's federally backed. And we'll also have the links
in there as well if you're looking at going ahead
and securing a new credit card to have on hand
just in case, and you can find those at how
to money dot com. Yeah, buddy, all right, I always
love these Friday episodes. A lot of information to get
out there, a lot of good information to at the beginning.
(27:21):
So all right, well, we'll keep punkering down and Matt
until next time. Best friends out, best friends out,
Hosts And Creators
Joel Larsgaard
Matthew Altmix
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