How Can the Mortgage Relief Program Assist You?

How Can the Mortgage Relief Program Assist You?

Additional coronavirus mortgage relief is available under new Biden legislation.

If borrowers encountered financial difficulty as a result of the coronavirus epidemic, the Coronavirus, Aid, Relief, and Economic Security (CARES) Act ordered lenders holding federally backed single-family mortgages to defer borrowers’ payments for up to 360 days. Owners of multifamily apartments with federally backed mortgages were eligible for a similar but shorter (90-day) deferment.

Following the financial crisis of 2020, further legislation, such as the Consolidated Appropriations Act of 2021 and the American Rescue Plan Act of 2021, as well as presidential executive initiatives, resulted in greater mortgage relief.

TAKEAWAYS

If your mortgage is federally guaranteed, provisions of the 2020 CARES Act and subsequent legislation enable you to possibly suspend payments for up to 18 months if you endure financial difficulty as a result of the 2020 financial crisis.
If your loan is backed by the U.S. Department of Housing and Urban Development (HUD), the Federal Housing Administration (FHA), the United States Department of Agriculture (USDA), or the United States Department of Veterans Affairs (VA), or if you own a multifamily rental unit with a government-backed loan, you can apply for initial mortgage relief.
For properties guaranteed by Fannie Mae and Freddie Mac, there is no deadline for applying for first forbearance.
The government funded loan foreclosure moratorium terminated on July 31, 2021.
Borrowers may apply for forbearance to seek mortgage relief until September 30, 2021.
You will not be charged late fees or have your credit record reported under the Coronavirus Aid, Relief, and Economic Security (CARES) Act legislation.
Being in forbearance may help you avoid foreclosure.

If your loan is not federally guaranteed, you may contact your loan servicer, state government, or local government to learn about your alternatives.

Additional financing for housing assistance is included in both the Consolidated Appropriations Act of 2021 and the American Rescue Plan of 2021.

Affecting Mortgages

COVID-19 mortgage relief is available for loans guaranteed by the federal government or government-sponsored enterprises (GSEs), and is defined as loans that:

Federal Housing Administration (FHA) insurance (FHA)
Home equity conversion mortgages handled by the US Department of Housing and Urban Development are insured under Section 255 of the National Housing Act (HUD)
Guaranteed or guaranteed by the United States Department of Veterans Affairs under Section 184 or 184A of the Homes and Community Development Act of 1992, which targets American Indian families and Hawaiian housing (VA)
Purchased or securitized by the Federal Home Loan Mortgage Corp. (Freddie Mac) or the Federal National Mortgage Association (FNMA) • Guaranteed, insured, or made by the United States Department of Agriculture (USDA) (Fannie Mae)

Residential property owners, as well as landlords and other commercial property owners, may hold federally qualifying mortgages. Residential mortgage borrowers and multifamily property owners have different restrictions.

Call your lender immediately away and apply for a foreclosure prevention strategy such as a mortgage modification.

Do not forsake your property, and be careful to react to your lender’s questions. Your lender has the right to foreclose if you leave your property or are unable to contact them for more than 90 days.

Contact a HUD-approved housing counselor if you’re feeling overwhelmed by your alternatives. They have offices in every state and are willing to work with you for free to help you avoid foreclosure.

How can you know whether your loan is supported by the federal government?

Here are some steps you may take to see whether your loan is supported by the federal government, making you eligible for the assistance mentioned above:

Contact your mortgage servicer via phone or letter. Your servicer is expected to inform you of who owns your mortgage and give you the owner’s name, address, and phone number.
Look it up on the internet. Find out whether your mortgage is owned by Fannie Mae or Freddie Mac by using loan search tools supplied by those two government-backed lenders.
If you don’t know who your servicer is, go to the Mortgage Electronic Registration Systems (MERS) website to find out.

What if your mortgage isn’t guaranteed by the government?

Most non-government backed lenders and loan servicers, according to federal authorities, will adopt measures similar to those established by the CARES Act and later legislation. To find out, call your loan servicer and inquire about any initiatives in place to assist homeowners affected by the coronavirus epidemic with their mortgage payments. Follow any instructions you are provided.

Although the CARES Act does not force private lenders to provide mortgage help, if you and your lender reach an agreement to modify your loan, the rule prohibiting credit bureaus from disclosing decreased or halted payments applies to you.

If your mortgage forbearance is about to end, you may be able to ask for an extension—but you must do so before the forbearance period finishes.

Forbearance on your mortgage (Paused Payments)

If you have a government-backed mortgage and are experiencing financial difficulty as a result of COVID-19, you may put your mortgage payments on hold for up to 18 months (including extensions) via a procedure called as forbearance.

If your mortgage is guaranteed by Fannie Mae or Freddie Mac, you may seek entire forbearance for up to 18 months. You must have been in an active forbearance plan as of September 30, 2021 to be eligible. The maximum period of forbearance is 12 months in all other cases.
You may seek up to 18 months of total forbearance if your mortgage is guaranteed by HUD/FHA, USDA, or VA. You must have sought a first forbearance plan on or before September 30, 2021, to be eligible. The maximum period of forbearance is 12 months in all other cases.

If you own a multifamily rental property with a federally backed loan, the Federal Housing Finance Agency (FHFA) issued an extension of the forbearance deadline on September 24, 2021, with no new date set at this time.

If your multifamily property is granted forbearance, you must: • Inform your tenants in writing about the protections available to them during forbearance.

Agree not to evict them since they haven’t paid their rent while your property is under forbearance.
Provide renters with a 30-day notice to quit (for other reasons).
Agree not to charge them late fees or penalties if they fail to pay their rent on time.
Give renters the option of paying back rent over time (not in a lump sum).

If a private lender or the CARES Act offers you forbearance, read the conditions carefully before signing. It’s preferable if the missed payments are added to the end of your loan term. Some lenders, especially those in the private sector, may have unique conditions that only allow payments to be deferred for a limited period of time before requiring a balloon payment.

Discrimination in mortgage financing is against the law. There are actions you may take if you believe you’ve been discriminated against because of your color, religion, sex, marital status, use of public assistance, national origin, handicap, or age. Filing a report with the Consumer Financial Protection Bureau (CFPB) or the Department of Housing and Urban Development (HUD) is one such action.

How to Make a Forbearance Request

To obtain forbearance as a homeowner with a federally backed mortgage loan, contact your loan servicer (the business to whom you make payments). You don’t need to submit a lot of paperwork; rather, you only need to confirm your financial difficulty, which you may do over the phone. The first forbearance period might last up to 180 days. You may extend your forbearance for an additional 180 or even 360 days, depending on when your first forbearance started.

To be accepted for forbearance relief, landlords of multifamily units have to be current on payments as of February 1, 2020. If necessary, landlords should make an oral or written request to their servicer, who may authorize a 30-day forbearance with further extensions of up to 60 days.

Right to put an end to forbearance

The CARES Act allows you the opportunity to stop forbearance at any time as a borrower. If you have a government-backed loan on a single-family home or a multifamily complex, this applies to you.

What is the purpose of forbearance?

There are no additional penalties, interest, or late fees.

Your servicer cannot charge you any penalties, interest, or fees that would not have been imposed if you had made your payments on time and in full during any forbearance period given to you. During any forbearance period provided to the landlord, landlords may not charge renters any fees or penalties for late rent payment.

There will be no credit bureau reporting.

Lenders are not allowed to record late or missing payments to credit agencies if you are enrolled in one of the forbearance programs. This implies that not making full payments or not paying at all will have no impact on your credit score.

26th of August, 2021

Despite the fact that the CDC’s national eviction moratorium was overturned by the United States Supreme Court on Aug. 26, 2021, numerous states, including New York, California, New Jersey, and others, have prolonged their statewide eviction moratoriums until June 1, 2022.

There will be no foreclosures or evictions.

Foreclosures and evictions for government backed mortgages were prohibited until September 30, 2021.

Additional Support

If you need it after your forbearance term ends, you may be eligible for further aid. Work with your servicer and, if feasible, get back on track with your payments. If you still need help, inquire about additional choices with your service provider. This might involve lowering your monthly payments or modifying your loan in any way.

You cannot be reported to credit agencies as “not current” on a loan if you and your lender reach an agreement on a loan modification.

Homeowners and landlords may get financial assistance.

Forgiveness is not the same as forbearance. Forbearance just delays the eventual day when payments that have been postponed must be made up. The Homeowner Aid Fund and the Emergency Rental Assistance program are two programs financed by the Consolidated Appropriations Act of 2021 and the American Rescue Plan Act of 2021, which give financial assistance to homeowners and landlords.

Fund for Homeowner Assistance

The Homeowner Assistance Fund (HAF) was established to help homeowners avoid mortgage defaults, foreclosures, loss of utilities, and eviction. The usage of cash is prioritized for homeowners who have been through the most difficult times. On Nov. 12, 2021, the fund’s guidance was modified to extend the deadlines for applying for money for specified locations to Dec. 15, 2021. The money may be utilized for a variety of things, including: • mortgage assistance • homeowner’s insurance

Payments for utilities
Other specified reasons

How to Request Funds for Homeowner Assistance

Funds for homeowner aid are being provided to states for redistribution to homeowners. The US Department of the Treasury has supplied states with assistance for building their own HAF programs.

After your state’s HAF plan has been authorized and its system is up and functioning, you will seek funding from it. Meanwhile, the Homeowner Assistance Fund homepage of the National Council of State Housing Agencies has a map depicting the current condition of each state’s HAF.

Rental Assistance Program in Case of Emergency

Renters who are unable to pay their rent or utilities are eligible for assistance under the Emergency Rental Assistance (ERA) program. States, US territories, local governments, American Indian tribes, Tribally Designated Housing Entities, and the Department of Hawaiian Home Lands get the funding directly. These organizations may utilize ERA money to help people with their rent via current or new rental assistance initiatives.

How can I get rental help in an emergency?

You must apply for ERA assistance via the proper state or agency since the Treasury distributes ERA monies to states and other bodies. The Treasury has launched a website to assist renters and landlords in locating rental assistance services in their region. It may be used to refer you to the relevant state or other authorities for information on how to apply for assistance or to assist your renters in doing so.

Is There a Mortgage Stimulus Program?

There is no mortgage stimulus program funded by the federal government. It’s either beautifully crafted mortgage refinancing advertising or blatant spam if you encounter an ad for a “new 2021 mortgage stimulus payment” or anything along those lines.

What has President Biden done to help people with their mortgages?

“Shortly after entering office, the Biden-Harris Administration extended the foreclosure moratorium and mortgage forbearance enrollment period for homeowners with government-backed mortgages to give help to suffering homeowners,” according to a White House news statement. In addition, President Biden’s American Rescue Plan includes $9.961 for the Homeowner Assistance Fund, which encourages loan modifications and payment reduction choices on all federally backed mortgages.

Is it Possible to Change Your Loan After Forbearance Ends?

Yes. The Consumer Financial Protection Bureau (CFPB) has announced a new regulation that requires lenders to enable borrowers who meet specific hardship criteria to modify their loans in a simplified manner. This regulation took effect on August 31, 2021, and it is still in force until December 31, 2021.

Will my house be foreclosed now that the forbearance period is over?

Despite the fact that most debtors’ forbearance periods have finished, the CFPB and the Biden Administration have implemented additional restrictions to avert a major wave of impending foreclosures. Lenders must provide borrowers with a variety of alternatives, including:

Allowing borrowers to restart mortgage payments and apply any missed payments to the remaining balance of their loan
Reduce their monthly mortgage payments with a simple loan modification
Allowing debtors to sell their houses is number three.

If borrowers are unable to take advantage of any of these choices, further limitations will remain in place until December 31, 2021. Lenders may only begin the foreclosure procedure if the borrower has abandoned their property, has not replied to lender inquiries for more than 90 days (and is more than 120 days behind on payments), or has been more than 120 days behind on payments prior to the epidemic (March 1, 2020).

Final Thoughts

Don’t simply quit paying your bills. If you’re in a tough spot, you could have more alternatives than you think. You should not cease making payments on your loan, whether it is guaranteed by the federal government or a private lender. You must call your lender or servicer to inform them that you are experiencing financial difficulties. Failure to contact your lender may result in a variety of negative outcomes, including increased fees, late credit reports, and, eventually, foreclosure and eviction.