What Mortgage Relief Does the CARES Act Afford Borrowers in the USA?

Question from James, What Mortgage Relief Does the CARES Act Afford Borrowers in the USA?

Answer from AI:

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted in March 2020, provides certain protections for homeowners with federally backed mortgages. Here are some of the key provisions:

Federally Backed Mortgage Loan Forbearance

Under the CARES Act, borrowers with federally backed mortgage loans affected by COVID-19 can request forbearance, a temporary pause or reduction in their monthly mortgage payments, for up to 180 days. They also have the right to request an extension for up to another 180 days.

No Additional Fees, Penalties, or Interest

During the forbearance period, the lender cannot charge any additional fees, penalties, or interest beyond what would have been charged if the borrower made all contractual payments on time and in full under the terms of the mortgage contract.

Foreclosure Moratorium

The CARES Act also includes a 60-day foreclosure moratorium starting March 18, 2020. This means that the lender or loan servicer may not initiate any judicial or non-judicial foreclosure process, move for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction or sale.

Note: These protections apply to federally backed mortgage loans, which include loans under the Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA), U.S. Department of Agriculture (USDA), Fannie Mae, and Freddie Mac.

How to Request Forbearance or Other Assistance

To request forbearance or find out about other assistance options, borrowers should:

1. Contact their mortgage servicer (the company where they send their monthly payments) as soon as possible.
2. Clearly explain their situation and hardship caused by the COVID-19 pandemic.
3. Ask about available relief options.

Legal Advice and Assistance

While the CARES Act provides these protections, navigating the process can be complex. It may be beneficial to consult with a legal professional or a HUD-approved housing counselor for personalized advice.

For more information, you can visit the Consumer Financial Protection Bureau’s guide on the CARES Act mortgage forbearance.

Remember, the information provided here is general in nature and does not constitute legal advice. Always consult with a legal professional for advice tailored to your specific circumstances.