President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security Act (commonly referred to as the “CARES Act”) into law on March 27, 2020. The CARES Act provides mortgage relief for those affected by the drastic economic impact caused by the Covid-19 (“Coronavirus”) pandemic.
In what is a continually developing and changing landscape, it is difficult to know exactly how quickly and effectively the CARES Act’s assistance will reach Americans, but the effort is a step in the right direction and HUD Secretary Ben Carson stated that immediate help is now available to those who need it. Here are a few provisions to that homeowners may want to be aware of.
The CARES Act will provide assistance for FHA-insured mortgages for single family homeowners experiencing financial hardship as a result of the Coronavirus. The language of the CARES Act makes this financial assistance mandatory. “[M]ortgage servicers must extend deferred or reduced mortgage payment options - called forbearance - for up to six months, and must provide an additional six months of forbearance if requested by the borrower.” (https://www.hud.gov/press/press_releases_media_advisories/HUD_No_20_048.)
The FHA further instructed mortgage services regarding being flexible on negative credit reporting actions taken against consumer under the Fair Credit Reporting Act.
Even homeowners with mortgages that are not FHA-insured and face economic hardship due to the Coronavirus should still contact their mortgage servicer to inquire about any available loss mitigation options.
For more information and resources, visit https://www.hud.gov/coronavirus. For those with FHA-insured mortgages, consult https://www.hud.gov/sites/dfiles/SFH/documents/COVID-19HomeownerHelp.pdf.