COVID-19 Mortgage Forbearance
With the global COVID-19 pandemic, many people have suffered reduced income – for many, income has gone down to zero. The response from the U.S. Government has been substantial, and the CARES Act, enacted in March of 2020, provides relief for many taxpayers. The CARES Act also provides for COVID-19 mortgage forbearance for many borrowers, and we will explore how that works in this article. Please bear in mind that this is a very fluid situation. COVID-19 mortgage forbearance is new, and it’s rapidly evolving. What is true today may not be true tomorrow. Update May 19, 2020: the rules have changed in favor of those receiving forbearance. This article (and video) mention that conventional loan borrowers need 12 months in a row without a missed or late payment. The new guidelines say that if you have been in forbearance but have made at least 3 on-time payments since exiting forbearance, you can then refinance your mortgage or get a new one. See this article on CNBC. COVID-19 Mortgage Forbearance Presentation Video What is Mortgage Forbearance? Mortgage Forbearance is a temporary freeze on your mortgage payments. Your Loan Servicer Must Agree to the Forbearance. A Servicer is the Bank/Lender/Company that collects loan payments. What does Forbearance mean under the CARES Act? Borrowers are entitled to a temporary freeze of mortgage payments up to 180 Days – if you say have been impacted by COVID-19. No documentation is required to prove you have been impacted. Please know that many servicers will only initially offer you 90 days … Read More