What benefits are available for your mortgage under the CARES Act? The Law Office of Michael A Ziegler: Debt Fighters gives the details to know your right
The COVID-19 pandemic has changed everything—the way we interact with the world, the way we work, and the way we spend our free time (glad sports are back!). Just like everything else, the pandemic has had a huge impact on people’s finances. That impact has cause folks to not make their mortgage payments. CNBC reported that 32% of U.S. households missed their July housing payments, which is a “historically high” number.
To alleviate the historically high lapse in mortgage payments, the CARES Act has put in place protections for people who have government-backed mortgages. How do you know if your mortgage is government-backed? One of the easiest ways is to ask your mortgage servicer if any of the following entities back your mortgage:
- Federal Housing Administration (“FHA”)
- Veterans Affairs (“VA”)
- U.S. Department of Agriculture (“USDA”)
- Fannie Mae
- Freddie Mac
If you have one of those government-backed mortgages, the CARES Act allows you to temporarily suspend payments if you are experiencing financial difficulty due to the impact of coronavirus. Those protections include:
- You have the right to request forbearance of up to 180 days.
- You have the right to request an extension for another 180 days.
- No additional fees, penalties, or interest can be added to your mortgage account during the forbearance. Regular interest will still accrue.
- If your mortgage was current when the CARES Act forbearance is granted, your mortgage servicer is required to report your account during the forbearance period to the Credit Reporting Agencies.