A new federal law put in place two protections for homeowners with federally or Government Sponsored Enterprise (GSE)-backed mortgages. Learn more about these options and if they’re right for your situation.
If you don’t have a federally or GSE-backed mortgage, you still may have relief options through your mortgage loan servicer or from your state. Find out who owns or services your mortgage.
CARES Act relief for all federally or GSE-backed mortgages
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 until at least June 30, 2020. Specifically, the CARES Act initially prohibited lenders and servicers from beginning a judicial or non-judicial foreclosure against you, or from finalizing a foreclosure judgment or sale for 60 days after March 18, 2020. The GSEs and the FHA have extended this protection for homeowners with single-family GSE-backed or FHA-insured mortgages until at least June 30, 2020.
- Second, if you experience financial hardship due to the coronavirus pandemic, you have a right to request and obtain a forbearance for up to 180 days. You also have the right to request and obtain 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.
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.
What to do
You must determine who owns or backs your mortgage to see if one of these mortgage relief options may be available.
First, figure out who services your mortgage
Your mortgage servicer is the company that you send your mortgage payments to each month. This is who you need to contact.
If you don’t know or can’t remember who currently services your mortgage, there are several ways to find out, including looking at your mortgage statement for contact information.
Find out who owns or services your mortgage.
Second, see if your mortgage is federally or GSE-backed
To be eligible for protections under the CARES Act, your mortgage must be federally insured, guaranteed, owned, or otherwise backed or funded by one of the federal agencies or Government Sponsored Entities (GSEs) listed below. Most mortgages are federally or GSE-backed.
If you don’t know who insures, guarantees, owns or backs your mortgage, you can call your servicer or see the link above. The servicer has an obligation to provide you, to the best of its knowledge, the name, address, and telephone number of who owns or backs your loan. Your mortgage documents and note may also tell you, especially if you have a VA, USDA, or FHA loan.
Third, see if your state offers additional mortgage relief options
Many states are implementing or considering various mortgage relief options, including the suspension of foreclosures. Check your state’s government website for details
Request forbearance or mortgage relief
To request CARES Act forbearance, you’ll need to reach out to your servicer. To ensure that you are ready for that conversation, we’ve got some information to help you prepare.
Call your servicer
For homeowners with mortgages covered by the CARES Act, you only need to explain that you have a pandemic-related financial hardship, directly or indirectly related to the pandemic.
Servicer’s may have scripts that they use when they talk to you. You can review scripts from Fannie Mae and Freddie Mac , to help you get a sense of what to expect.
You may have to wait on the line for a while to speak to your mortgage servicer because there are a lot of people also in need right now.
Be prepared with the following questions you want to ask. Check your servicer’s website before you call to see if there is a list provided of information you may need or if you can apply online.
Have your account number handy.
Ask these questions
- What are the criteria you will use to determine my forbearance?
- What are my rights if I disagree with your determination?
- What options are available to help temporarily reduce or suspend my payments?
- Are there forbearance, loan modification, or other options applicable to my situation? What fees are associated with each option?
- When will you waive the late fees on my mortgage account?
- What are my payment options at the end of the forbearance period?
- Will interest be charged on my unpaid mortgage payments during forbearance?
Get it in writing
Once you’re able to secure forbearance or another mortgage relief option, ask your servicer to provide written documentation that confirms the details of your forbearance agreement and that you’re clear on what the terms are.