The outbreak of the COVID-19 virus has had a huge effect on the world. In the US, many Americans are struggling with reduced income, offsetting debts, unemployment, and worse, keeping a roof over their heads. To help with this, the government has enacted the Coronavirus Aid, Relief, and Economic Security Act, with the main objective of providing financial relief options to Americans affected by this pandemic. In this article, we will discuss the mortgage aspects of the CARES Act in detail.
The upside of the coronavirus aid, relief, and economic security act
There are two main upsides to this new act which has helped to mitigate the mortgage problem faced during this pandemic. Firstly, the provisions of the Act allow borrowers up to a 180-day forbearance period, with an option of an additional 180 days or stopping the forbearance altogether at any time. You also don’t have to be directly affected by the coronavirus outbreak or be experiencing difficulties in mortgage payments before this provision applies to you.
Secondly, the act does not require lenders to report forbearance to credit bureaus. So, it should not affect your ability to refinance or make purchases in the future. Furthermore, the act bars lenders from charging any sort of additional fees, interest, or penalties during forbearance beyond what should accrue normally. An extra provision is that there will be no foreclosures for 60 days after March 18, 2020.
Some of the loans for which you may be able to get assistance
The type of mortgage you currently have may determine the relief options available to you. The following is a brief look at a few of the mortgage forbearance relief programs that are currently available.
- Fannie Mae
Fannie Mae customers could be eligible for a 12 months reduction or suspended mortgage payment. Also, there is a COVID-19 deferral payment option that is structured such that instead of paying the amount of the forbearance at the end of the forbearance, it can instead be paid at the end of the mortgage.
- Veteran Affairs Loans
The Department of Veterans Affairs which guarantees VA Loans has also been impacted by The CARES Act. Changes to the VA mortgage lenders program pertain to the duration for payment of forbearance and payment deferrals. Of course, there are additional eligibility requirements.
- Freddie Mac
The relief stipulations afforded to Freddie Mac customers are very similar to those of Fannie Mae customers. Borrowers have been made eligible for a 12 months forbearance period which would not be reported to credit bureaus. Also, at the end of the forbearance term, if you resume your regular mortgage payments but are unable to make additional lump sum payments, then Freddie Mac makes it possible for a payment deferral in consideration of COVID-19.
- Federal Housing Administration Loans
The FHA loans as a form of mortgage relief, allow for a standard mortgage forbearance to last for six months and special forbearance which usually applies to unemployed individuals can last for more than a year.
If you, like so many other people, are having trouble making mortgage payments, you may have options. The attorneys at Dsouza and Strachan Law Group have the knowledge and experience you need to navigate mortgage payment and loan issues. Contact Dsouza and Strachan today for a free consultation.