Author: John Baker
Although the pandemic has subsided exceedingly, some of its effects can still be felt by many Americans. Fortunately, one of the newest U.S. government programs offers low-income earners additional coronavirus mortgage relief.
Discover if you are eligible and how you can get help from this program.
Overview of The CARES Act
The Coronavirus, Aid, Relief, and Economic Security Act, also known as the CARES Act, is a new Biden legislation that instructs lenders of federally backed single-family home mortgages to suspend their clients’ payments for a maximum of 360 days. The same goes for forbearance.
Also, borrowers are entitled to this relief if they are low-income earners and if they were under extreme financial difficulties when the pandemic hit.
Key Things that Beneficiaries Need to Know
Before you apply for the mortgage relief program, here are the important things you need to know:
- The 2020 CARES Act and its subsequent legislation will allow anyone who experienced financial difficulties due to the coronavirus pandemic to suspend payments for up to 18 months if the federal government backs their mortgages.
- You can apply for mortgage relief if you have an existing loan that is backed by the Federal Housing Administration (FHA), the U.S. Department of Agriculture (USDA), and the U.S. Department of Housing and Urban Development (HUD).
- No charges for late fees and reports to credit bureaus will be imposed under the CARES Act.
- Avoiding foreclosure is possible if in forbearance.
- Additional funding for housing relief is available through the American Rescue Plan of 2021 and the Consolidated Appropriations Act 2021.
- You can also contact your loan servicer or local authorities for other options if loans are not federally backed.
Is your Loan Federally Backed?
Some of the actions that you can take to know if your loan is federally backed include:
- Checking online by using loan lookup tools like: https://loanlookup.freddiemac.com/ or https://www.knowyouroptions.com/loanlookup
- Visiting the Mortgage Electronic Registration Systems (MERS) website to know who your servicer is
- Contact your mortgage servicer directly; they can tell you the information on your mortgage.
Private lenders are not obliged to offer mortgage assistance under the CARES Act. But if you and your lender come to an understanding or some modification regarding your initial agreement, then the law of not reporting paused or reduced payments to credit bureaus also applies to you.
You can also contact your provider and find out what programs they have in place concerning mortgage relief and follow the instructions they will provide you.
When the going gets tough, it is quite relieving to know that the U.S. government has plans and laws in place. But you mustn’t stop making payments regarding your mortgage. This may be difficult to do, especially when under extreme stress, but know that there are options and laws to help you out. You only need to reach out to your lender and let them know that you are having trouble keeping up with your payments. Doing otherwise may result in serious consequences that can potentially lead to your eviction.