CARES Act Mortgage Forbearance: What You Need to Know — consumerfinance.gov

CARES Act Mortgage Forbearance: What You Need to Know — consumerfinance.gov

If you are experiencing difficulty making
on-time mortgage payments due to the national coronavirus emergency, forbearance may be
an option for you. Forbearance can help consumers get back on
their feet during short-term financial difficulty, but there are a few things you need to know
and some important decisions you'll need to make. Forbearance is when your mortgage servicer,
that's the company that sends your mortgage statement and manages your loan, or lender
allows you to pause or reduce your payments for a limited period of time. Forbearance does not erase what you owe. You'll have to repay any missed or reduced
payments in the future. So, if you're able to keep up with your
payments, keep making them. The types of forbearance available vary by
loan type. If your mortgage is backed by the federal
government-this includes FHA, VA, USDA, Fannie Mae and Freddie Mac loans-provisions
of the recently enacted CARES Act allow you to temporarily suspend payments if you are
experiencing financial difficulty due to the impact of the coronavirus on your finances.

Loan servicers may also have forbearance or
deferment options for non-government backed or private loans, but the exact options available
to you may differ. Here's how this works for federally-backed
mortgages under the CARES Act. If you are experiencing financial hardship
due to the coronavirus pandemic, you have a right to request forbearance for up to one
hundred eighty days. You also have the right to request an extension
for up to an additional one hundred eighty days. But, you must contact your loan servicer to
request this forbearance. There won't be any additional fees, penalties
or interest added to your account. But, your regular interest will still accrue. Other than telling your servicer that you
have a pandemic-related financial hardship, you won't need to submit additional documentation
to qualify for this forbearance. It's important to find out what options
are available to you. The best place to find that information is
from your loan servicer. Look for their contact info on your monthly
mortgage statement. Right now, most financial institutions, including
mortgage servicers, are experiencing high call volumes, so there may be long wait times
to talk to someone on the phone.

Fannie Mae

Regardless of the type of mortgage you have
or how you communicate with your servicer, here are some things to consider. If you cannot make your mortgage payments,
and you are looking to suspend or reduce your payments, you will need to work with your
servicer. If you decide to move forward with a forbearance
plan, ask your servicer how you will be required to pay back the amount owed after the forbearance
period. Will you owe the entire unpaid amount in a
lump sum once the pause period has ended or at the end of the loan term? Can the loan term be extended so that missed
payments are added to the end of your mortgage? Will your subsequent monthly payments be higher
for a period of time to make up the deferred amount? Finally, be on the lookout for scams and scammers
looking to take advantage of consumers affected by coronavirus.

You might receive fraudulent calls, emails,
text messages or other "offers" to help you reduce or stop your mortgage payments. Make sure you are working directly with your
mortgage servicer. For more in depth information, including information
on how to find a HUD-approved housing counselor, go to consumerfinance.gov/coronavirus..

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