Know Your COVID Mortgage Waiver Rights
A new CFPB report says some mortgage lenders did not comply with mortgage abstinence laws during COVID. Lenders misled borrowers about their rights, imposed unauthorized fines and illegally evicted tenants . Here’s what you need to know and how to report a bad faith lender.
Know your rights as a borrower
The CARES Act provides for a complete freeze on payments until March 31, 2021 if you report financial difficulties due to COVID. Federally backed borrowers who choose to accept the grace period will be able to withhold payments, including interest or penalties, for up to 360 days from the date of the request (this does not apply to private loans, but many banks have voluntarily offered 180 days waiver).
Moreover, the law – in tandem with President Biden’s recent decree – provides for the suspension of foreclosures and foreclosures until March 31, 2021. provided.
How to apply for abstinence
This part is simple: you just have to ask your lender (it would be nice to get a written report on this, or at least take notes if you are asking for leniency over the phone). However, anecdotal evidence suggests that lenders generally do not require proof of difficulty either.
Don’t be fooled by your lender
Now that you know your rights, make sure your lender is not breaking the rules. According to the bank rate , examples of this include:
- Delaying the processing of a petition for abstention from punishment. CFPB reports that in some cases, service centers have been slow to process authorization requests. This has resulted in some borrowers missing out on payments and hitting their credit rating.
- Patience of borrowers without their knowledge. On other occasions, they thought they were just looking at the leniency information on the service staff website or discussing financial issues with representatives over the phone. These borrowers did not realize that they were applying or that the support staff would handle abstinence.
- Erroneous collection notifications. The CARES Act promised borrowers that they would not have to worry about mortgage payments from six months to a year. However, some service companies sent notifications to borrowers that their accounts were out of date and that they might face late fees and downgrades. These notices “may mislead consumers who are eligible for CARES benefits,” the CFPB said in a statement.
- Misleading lump sum claims. CARES does not require borrowers to pay a large sum for missed payments after the end of abstinence. Instead, the borrower resumes monthly payments. However, as reported by the CFPB, some service providers have told borrowers that they will need to make lump sum payments to cover all missed monthly payments when the abstinence ends.
How to file a complaint
Start by contacting your lender or your caregiver directly, as they will be able to resolve your concerns in no time (especially if it is something relatively minor that might just be a mistake, such as a request for abstinence that takes too long for processing).
If that doesn’t work, or you think your lender is intentionally circumventing CARES law, contact the Consumer Financial Protection Bureau (CFPB) by filing a complaint here . The CFPB will work on your behalf to obtain approval (most companies will respond to complaints within 15 days).