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Why some renters, homeowners may not have to make payments right now

Moratoriums may make it possible to skip rent, mortgage payments right now. But that comes with a big disclaimer.

MOLINE, Ill. — Some Quad Cities families are having to make tough financial decisions amid the coronavirus pandemic. Some have had their hours cuts or lost their job altogether but right now, some renters and homeowners may not have to make payments.

The federal government has already taken a step to protect homeowners with mortgages back by the Federal Housing Administration, Fannie Mae or Freddie Mac. They won't be foreclosed on if they miss payments. 

The governors of Iowa and Illinois have imposed moratoriums that help to protect renters and other homeowners. They dictate that they can't be evicted or foreclosed on for making payments.

"As we sit here today, neither can a landlord evict you, neither can a mortgage company or bank foreclose on your real estate," says Michael Galvin, attorney and partner at Vanderginst Law. "Now, that doesn't mean you won't have to pay them back when this is all over, but at least for right now, you're safe and don't need to worry about being kicked out of your home."

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At least 35 states have a moratorium like this, preventing landlords from evicting tenants, shutting off their power or changing their locks for missed payments. Galvin says if your landlord tries to evict you right now, you should contact the police.

Financial expert Mark Grywacheski suggests contacting your landlord, bank or mortgage company to let them know if you're struggling right now because of COVID-19.

"Most will be highly appreciative of this," he says. "It alleviated some of their concern that you’ll default, pay nothing and simply bail on their obligations."

Grywacheski says those who may miss payments should plan on budgeting their stimulus and unemployment checks to make those payments at a later date.

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The moratorium in Illinois is indefinite until the pandemic is over. Iowa's moratorium on these payments goes through April 16th right now.

Iowa Legal Aid set up a free legal information hotline to answer any questions about evictions, foreclosures or other legal matters associated with the COVID-19 pandemic.

Call the free legal information hotline for support at 1-800-332-0419. 

Click here for more information.