Problems Paying Your Mortgage During COVID? – Check Out the Options
Published On: December 14, 2020
Are you financially stressed right now? What to know about options, from debt negotiation to bankruptcy
This short video from the Consumer Financial Protection Bureau “CFPB” is actually very informative and goes over the various options for homeowners who have received a forbearance. If the homeowner is not in Chapter 13, contacting their servicer or discussing their options with a HUD approved counselor is their best course of action. If the homeowner is in Chapter 13, they need to contact their attorney (you) for advice.
Under the CARES Act, forbearance is straightforward. Essentially any borrower who wants forbearance can get it.
The pause on payments applies to anyone with a government-backed loan. Borrowers can apply for forbearance and get a 180-day break on payments with no penalties and no late charges. The missed payments are simply added to the end of the loan.
Borrowers can ask for an additional 180 days of forbearance. The CARES Act covers loans held by Fannie Mae or Freddie Mac or issued by the Federal Housing Administration or the U.S. Department of Veterans Affairs.
The CARES Act didn’t address jumbo loans, non-QM loans and other mortgages held by lenders or owned by private investors, but many banks voluntarily offered 180 days of payment relief.
The generous terms of forbearance are a sharp contrast to the mortgage industry’s response to the housing crash and the Great Recession. During that crisis, borrowers struggled to win relief from their loans, and foreclosures soared.
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