Eviction Moratorium

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  • #66331
    Elliott Balsley
    Participant

    I am currently renting a house, preparing to buy next year. My two housemates have been laid off due to Coronavirus, and they might not be able to pay rent for a while. Many cities have ordered a moratorium on evictions, but I’m wondering what effect this will have on a credit report. Since we are all jointly on the lease, any missed payments from them would look bad for me too, and I know that late rent is a major red flag for NACA.
    If there is a moratorium on evictions, does this also mean late payments would not be tracked?

    #66332
    Elliott Balsley
    Participant

    Apparently landlords only report late payments at their discretion, and in fact doing so requires their paying a fee to each credit bureau. So in general, how does NACA find out about late payments? Do they just check the credit report or something else?

    #66334
    Nelsont
    Member

    They check the rental ledger of your landlord, canceled checks and bank statements.

    #66339

    Indeed, they don’t just rely on the credit reporting. You’ll have your rent verified month by month looking at the account you’re paying from and the landlord’s records as reported by them on a form.

    #66343
    TTrumble
    Member

    Hello llamafilm,

    Rent is verified as Nelsont noted, through a Verification of Rental form sent to your landlord as well as your bank account records and cancelled checks.

    Late rent as a result of layoffs caused by the Coronavirus situation will no doubt have to be looked at on a case by case basis.

    One question I foresee coming is from people in situations such as yours or others who have been laid off or are working greatly reduced hours, but have significant savings for their MRF and want to know if they should use those funds to pay their rent or hold on to them.

    Very simply, if you have the funds to pay the rent, pay it, period. If your counselor sees that you were late with the rent but had the MRF funds and didn’t use them for the rent, you will face a twelve month setback without question. Please remember that on-time rent payment is the most fundamental means of showing that you are able to make an on-time mortgage payment each and every month.

    Better a brief setback to rebuild MRF than a full year that could be completely avoided.

    Bottom line is this is uncharted territory for all of us, and we are all simply going to have to work together, have even greater patience and be willing to endure a setback or two in some cases. But we will get through all this together.

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    • This reply was modified 7 months, 1 week ago by TTrumble.
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