Mortgage Protection Information
Updated on November 24, 2020
The Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, is a $2.2 trillion economic stimulus bill passed by the 116th U.S. Congress and signed into law by President Donald Trump on March 27, 2020 in response to the economic fallout of the COVID-19 pandemic in the United States.
The CARES Act contains important mortgage protection provisions for federally backed mortgages. Federally backed mortgages include FHA loans, VA loans, USDA loans, and those that are owned or backed by Fannie Mae and Freddie Mac. Initially, the law provided for a 60-day foreclosure moratorium (March 18-May 17, 2020).
That date has been extended several times and on August 27, 2020, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises) will extend the moratoriums on single-family foreclosures and real estate owned (REO) evictions until at least December 31, 2020. The foreclosure moratorium applies to Enterprise-backed, single-family mortgages only. The REO eviction moratorium applies to properties that have been acquired by an Enterprise through foreclosure or deed-in-lieu of foreclosure transactions.
To help keep borrowers in their homes during the pandemic, FHFA is extending the Enterprises’ foreclosure and eviction moratoriums through the end of 2020,” said Director Mark Calabria. “This protects more than 28 million homeowners with an Enterprise-backed mortgage.
While the CARES Act does not require non-government backed lenders and servicers to provide relief, regulators believe that most will also adopt similar policies. To find out, contact your loan servicer and ask what programs they are implementing to help homeowners impacted by the coronavirus outbreak. Your state may also offer additional mortgage protection programs.
We anticipate that millions of consumers will soon be facing unaffordable forbearance structures that will lead to unresolved disputes, a breakdown in communications with their mortgage loan servicer, manufactured defaults, preventable foreclosures, and disruptive evictions.
Accordingly, we are introducing a new COVID-19 Forbearance Review to determine if your mortgage loan servicer has accurately calculated the amount of principal, interest, and escrow items that were deferred during the pandemic. We know from experience that anytime there is a change in a mortgage loan account, the risk of error increases accordingly. If mistakes are made it’s best to correct them sooner rather than later.
One of the most important steps you can take today to protect your mortgage is to gather and organize your documents. Collecting any relevant paperwork is key to protecting your home and maintaining a detailed paper trail. Here is a list of all of the documents you should collect and organize.