How to Get Correct Information on Coronavirus Mortgage Benefits
The CARES Act, passed this spring, provides conditions for mortgage holders who find it difficult to make monthly payments. But as with nearly every part of government efforts to tackle the coronavirus, many borrowers have had a tough time getting this help.
Some clients received inconsistent information from their mortgage services, which only made it harder to get help paying, John Ryan, president and CEO of the Conference of State Banking Supervisors (CSBS) , told reporters in a phone call on Friday.
CSBS partnered with the Consumer Financial Protection Bureau (CFPB) to develop guidelines to assist consumers seeking help with mortgage payments.
When the CARES Act was passed in late March, it did two important things for borrowers with federally backed mortgages:
He put the foreclosure process on hold until June 30 and allowed homeowners to request a 180-day grace period for mortgage payments. An optional 180-day renewal is available at the end of the grace period.
To request an extension, you need to inform your loan agent that you are experiencing financial difficulties due to the coronavirus, but you do not need to provide proof of these difficulties. The grace period is available regardless of whether your loan debt was past due before March 13, when the President declared the coronavirus emergency.
It is important to understand that this relief does not require additional fees. The Consumer Assistance Guide says to be wary of anyone who offers to help you with your indulgence for a fee.
There will be no additional fees or penalties to stop paying your mortgage, but you will need to make payments that you missed later. “At the end of the abstinence period, you and your service staff will determine how you will repay any missed payments,” the manual says. In most cases, you will have several options for making missed payments, including a repayment plan or loan extension. According to the guidance, a lump sum should not be the only option for many borrowers.
If you introduce abstinence, you will still be allowed to make payments of your choice during this period. Also, getting a grace period cannot negatively affect your credit report – CARES requires mortgage companies to report bills as current if they were current when the grace period was applied.
You can download and save the CFPB and CSBS manual for your reference when communicating with your mortgage agent. You can get it here .
Have you received conflicting information from your mortgage agent? Did you have long waits to speak to someone, or was the process easy? Let us know in the comments.