If you’re concerned about how to pay your mortgage or rent due to the coronavirus national emergency, read on for information on what to do now, and what your options are for mortgage and rent payment relief.
If you’re concerned about how to pay your mortgage or rent due to the coronavirus national emergency, read on for information on what to do now, and what your options are for mortgage and rent payment relief.
The Consumer Financial Protection Bureau (CFPB), Federal Housing Finance Agency (FHFA) , and U.S. Department of Housing and Urban Development (HUD) are working together to help homeowners and renters during the coronavirus pandemic.
Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, there are two protections for homeowners with federally or GSE-backed or funded mortgages:
First, your lender or loan servicer may not foreclose on you for 60 days after March 18, 2020. Specifically, the CARES Act prohibits lenders and servicers from beginning a judicial or non-judicial foreclosure against you, or from finalizing a foreclosure judgment or sale, during this period of time.
Second, if you experience financial hardship due to the coronavirus pandemic, you have a right to request a forbearance for up to 180 days. You also have the right to request an extension for up to another 180 days. You must contact your loan servicer to request this forbearance. There will be no additional fees, penalties or additional interest (beyond scheduled amounts) added to your account. You do not need to submit additional documentation to qualify other than your claim to have a pandemic-related financial hardship.
Mortgage forbearance
Forbearance is when your mortgage servicer or lender allows you to pause (suspend), or reduce your mortgage payments for a limited period of time while you regain your financial footing.
The CARES Act provides many homeowners with the right to have all mortgage payments completely paused for a period of time.
Forbearance doesn’t mean your payments are forgiven or erased. You are still required to repay any missed or reduced payments in the future, which in most cases may be repaid over time. At the end of the forbearance, your servicer will contact you about how the missed payments will be repaid. There may be different programs available.
Make sure you understand how the forbearance will be repaid. There can be different forbearance programs or options, depending on the type of your loan.
For example, if you have a Fannie Mae, Freddie Mac, FHA, VA, or USDA loan, you won’t have to pay back the amount that was suspended all at once—unless you are able to do so.
If your income is restored before the end of your forbearance, reach out to your servicer and resume making payments as soon as you can so your future obligation is limited.
If you want to learn more
If forbearance is available to you, read our guide to help you make the best decision based on your situation.
Moratoriums suspend or stop foreclosure
Foreclosure is when the lender takes back the property after the homeowner fails to make required payments on a mortgage.
Foreclosure processes differ by state. Under federal law, a servicer generally cannot start the state foreclosure process until your loan is more than 120 days past due. There can be exceptions depending on your forbearance or loss mitigation program.
Source: consumerfinance.gov
