How to Get Coronavirus Mortgage Relief Under President Biden`s Leadership

New legislation offers additional Coronavirus mortgage relief

Don’t Just Stop Making Payments.

If borrowers suffered financial distress as a result of the Coronavirus outbreak, the Coronavirus, Aid, Relief, and Economic Security Act (CARES Act) ordered lenders holding federally-backed mortgages to delay borrowers’ payments for up to 360 days.

Several additional provisions affecting housing during COVID-19 can be found in the Consolidated Appropriations Act (CAA) 2021, which was signed into law on December 27, 2020, and the American Rescue Act of 2021, which was signed into law on March 11, 2021.

The CARES Act put a hold on foreclosures and related evictions until December 31, 2020, and then until January 31, 2021. President Joe Biden’s executive order extended the suspension until after June 30, 2021. Furthermore, the CARES Act has provisions for withholding negative credit reporting if relief has been provided.

If your mortgage is guaranteed by the federal government, the 2020 CARES Act gives you the option to stop making payments for up to 360 days if you run into financial difficulties. You will not have to paid late fees or have your credit history registered under the CARES Act. Eligible loan foreclosures and evictions are suspended until June 30, 2021.

If your loan is not federally guaranteed, you can contact your loan servicer, state government, or local government to learn about your options. Additional funding for housing assistance is included in both the Consolidated Appropriations Act (CAA) 2021 and the American Rescue Plan of 2021.

Mortgages Affected

Forbearance and foreclosure provisions in the CARES Act apply to mortgage loans guaranteed by the federal government and Government Sponsored Enterprises, which are classified as loans:

  • Insured by the Federal Housing Administration (FHA)
  • Insured under section 255 of the National Housing Act, which involves home equity conversion mortgages administered by the Department of Housing and Urban Development (HUD)
  • Guaranteed under section 184 or 184A of the Housing and Community Development Act of 1992, which targets Indian families and Hawaiian housing
  • Guaranteed or insured by the Department of Veterans Affairs
  • Guaranteed, insured, or made by the Department of Agriculture
  • Purchased or securitized by the Federal Home Loan Mortgage Corporation (Freddie Mac) or the Federal National Mortgage Association (Fannie Mae)

Residential property owners, as well as landlords and other commercial property owners, can hold federally qualifying mortgages. Residential mortgage borrowers and multi-family property owners have different laws.

You may be entitled to seek an extension of your mortgage forbearance but its about to expire, you must apply fast.

Paused Payments (Forbearance)

According to the CARES Act, if a residential borrower is facing financial distress as a result of COVID-19, you can be given forbearance on your federally guaranteed mortgage loan for up to 180 days, with the option to extend for another 180 days (potential relief for a total of 360 days).

Landlords with multi-family property mortgages could be eligible for relief as well. For multi-family mortgages, the CARES Act provides for a 30-day forbearance and up to two 30-day extensions. Mortgage forbearance applications are due by June 30, 2021.

If you’re given forbearance under the CARES Act or from any lender, read the terms carefully before signing. The best option is to simply add the missed payments to the end of your mortgage term. Some lenders, especially those in the private sector, may have special conditions that only allow payments to be deferred for a limited period of time before requiring a balloon payment.

Discrimination in mortgage lending is against the law. There are steps you can take if you believe you’ve been discriminated against because of your race, faith, sex, marital status, use of public assistance, national origin, disability, or age. A submission to the Consumer Financial Protection Bureau or the U.S. Department of Justice is one such move.

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How to Request Forbearance

To file a request claim as a borrower with a federally insured mortgage loan, contact the loan servicer (the company to which you make payments). You don’t need to file a lot of paperwork; you just need to confirm your financial distress on a standardized forbearance request claim form.

To be eligible for forbearance relief, landlords of multi-family units had to be current on payments as of February 1, 2020. Landlords can make an oral or written request to their servicer, who may approve a 30-day forbearance, if necessary. Multifamily mortgages insured by the federal government could be liable for up to two additional 30-day forbearance periods.

How to Request a Forbearance Extension

You have the same right to request an extension of up to 180 days as you did in your initial forbearance request (for a total of up to 360 days). To request a forbearance extension, contact your loan servicer. The extension is not pre-installed. There will be no extra fees, fines, or interest applied to your account (beyond the scheduled amounts). You do not need to request any additional documents besides your claim of financial distress due to the pandemic.

How to Find Out If Your Loan Is Federally Backed

To find out whether your loan is backed by the federal government, making you eligible for the help noted above, here are some actions you can take:

  • Call or write your mortgage servicer. Your service is required to tell you who owns your mortgage and provide you with the name, address, and phone number of whoever owns your mortgage.
  • Check online. Use loan lookup tools provided by Fannie Mae or Freddie Mac to find out if either of those two government-backed providers owns your mortgage.
  • Check the Mortgage Electronic Registration Systems (MERS) website to find your servicer if you don’t know who that is.

What If You Have a Non-Government-Backed Mortgage

Many non-government-backed lenders and servicers, according to federal regulators, would follow practices close to those required by the CARES Act. To find out, contact your loan servicer to inquire about any services in place to assist homeowners affected by the Coronavirus outbreak. Make sure to obey any guidance given to you.

While the CARES Act does not require private lenders to provide relief, if you and your lender reach an agreement to modify your loan, the legislation prohibiting credit bureaus from reporting diminished or paused payments applies to you.

Don’t ever stop paying the bills.

If you’re in a tough spot, you may have more choices than you think. You should not avoid making payments on your loan, whether it is sponsored by the federal government or a private lender. You must notify your lender or servicer that you are having difficulties making payments. Failure to contact your lender can result in a variety of negative consequences, including extra fees, overdue credit reports, and, eventually, foreclosure and eviction.

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