It’s no secret that the American economy has slowed down significantly since the novel coronavirus pandemic took the nation by storm. Schools and “non-essential” businesses have been shut down, the latter of which has forced millions of Americans out of work. As the days roll by, more (and more) people are running out of reserves and finding it increasingly difficult to pay their bills, including their mortgages.
Have you lose your job due to COVID-19 and now your mortgage payments are being interrupted? With no income, how are you to keep a roof over your head? Fortunately, the federal government has stepped up to the plate to help protect homeowners from becoming homeless through federal mortgage relief programs.
Federally-Backed Mortgage Loans
Do you have a federally-backed mortgage? If so, you’re in luck. Under the CARES Act, those borrowers who have federally-backed mortgages and are experiencing financial hardship as a direct result of COVID-19 have the option of requesting a forbearance period. To do this, the borrower is urged to contact their mortgage servicer directly. But what is a federally-backed mortgage? It includes the following loans:
- Fannie Mae
- Freddie Mac
The CARES Act states that borrowers affected by COVID-19 have the option of deferring their mortgage payments for up to 180 days. And if the borrower needs more time, they can request an extension for another 180 days of forbearance. What’s more, they will not be subject to any penalties, fines, or fees, however, interest will continue to accrue as usual.
Not sure if you have a federally-backed loan? According to the Consumer Financial Protection Bureau, almost half of all mortgages in the U.S. are either backed or owned by Freddie Mac or Fannie Mae, so it is possible.
“The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae, Freddie Mac, and the Federal Home Loan banks, is providing payment forbearance to borrowers impacted by the coronavirus for up to 12 months due to hardship. Penalties and late fees also are being waived. No delinquency related to forbearance will be reported to credit bureaus,” according to Forbes.
Need advice from a bankruptcy attorney your home going into foreclosure? Contact Dethlefs, Pykosh & Murphy today for a consultation.