Published by: R. Smetak | 4/16/2020

CFPB’s Answers to Mortgage Relief Questions

These changes have left many Americans in a state of uncertainty.

COVID-19 (coronavirus) has caused many economic implications for the U.S., not to mention for the rest of the world. These changes have left many Americans in a state of uncertainty.

While each day brings hope for return to normalcy, the federal and state governments have been working to create some relief for those financially impacted. For those who have concerns in regards to making their mortgage payments, the Consumer Financial Protection Bureau (CFPB) has created a guide to helping educate homeowners on their options and the details involved with each one.

If you can pay your mortgage, you should pay your mortgage.

If you aren’t facing an immediate issue, please don’t call your mortgage servicer. Lines are busy assisting those who won’t be able to make their payment. 

If you can’t pay your mortgage, or can only pay a portion, contact your mortgage servicer immediately.

Make sure you’re educated on the options that are available to you.

For those with federally backed mortgages, two protections are now in place by the new federal CARES Act (Coronavirus Aid, Relief, and Economic Securities):

Foreclosure Moratorium

When homeowner failing to make required mortgage payments, foreclosure* occurs with the lender taking back the property.

Under the CARES Act, your lender or loan servicer cannot begin foreclosure or finalize foreclosure judgment or sale 60 days after March 18, 2020.

Right to Forbearance

For those experiencing financial hardship due to the COVID-19 emergency, you can request forbearance on your mortgage payments for up to 180 days with the right to request one extension for another 180 days. No additional fees, penalties or additional interest (beyond your scheduled amount) will apply. Your claim to have pandemic-related financial hardship is the only required documentation needed when you contact your mortgage servicer to request forbearance.

Here’s a high-level 3-4-5…

3 Options for Relief

  1. Foreclosure Moratorium
  2. Forbearance – postponed payments
  3. Forbearance – reduced monthly payments

4 Important Things to Know about Forbearance

  1. Forbearance pauses or reduces mortgage payments for a limited period of time.
  2. Forbearance DOES NOT erase what you owe.
  3. Missed or reduced payments MUST be paid in the future.
  4. If you’re able, keep up with your mortgage payments.

5 Steps to Request Forbearance or Mortgage Relief

  1. Figure out who services your mortgage, and if your mortgage is federally backed.
    -If your loan is not federally backed, still move on to #2. Your servicer can discuss alternatives, or your state may provide an option.
  2. Contact your mortgage servicer.
    -Please be patient. They are receiving a high volume of calls.
  3. Be prepared to explain your situation.
    -Why you’re unable to make your payment
    -Whether the problem is temporary or permanent
    -Details about income, expenses, other assets
  4. Ask questions about what options are available to you.
  5. Get it in writing – receive written documentation confirming the details and terms of your agreement.
    -Keep this on hand.
    -Pay attention to your monthly statement and keep an eye on your credit.

For more information, check out the following:

CFPB’s Guide to coronavirus mortgage relief options

CFPB’s CARES Act Mortgage Forbearance: What You Need to Know Video

Union Home Mortgage Forbearance FAQ’s

UHM4You | COVID-19 Resources