Understanding your mortgage relief options during the pandemic

Many Americans are facing financial difficulties due to the coronavirus pandemic. As a homeowner, it’s essential to know the options that are available to you if you’re struggling to make your mortgage payment.

If you can’t pay your mortgage, here’s what you should know:

The Coronavirus Aid, Relief, and Economic Security (CARES) Act protects homeowners with federally backed mortgages* in two ways:

  • Foreclosure moratorium. This means your home cannot be foreclosed on until at least June 30, 2020.

  • Mortgage forbearance. You can request and receive up to a 6-month forbearance on your mortgage payments, with the option to extend for an additional 6 months, if you are experiencing a financial hardship due to the COVID-19 pandemic.

What Is Forbearance?

Forbearance allows you to temporarily pause or reduce your mortgage payments for a certain period of time. Forbearance is not a forgiveness of debt. You will still have to pay back any missed or reduced payments in the future. Repayment arrangements may be made in the form of a repayment plan, a loan modification, or a lump-sum payment.

If you are approved for forbearance:

  • You will not be charged additional fees, penalties, or interest (beyond what you would normally pay) during the forbearance period.

  • Your credit report and score will not be negatively impacted due to the paused or reduced payments.

To request forbearance, you must contact your loan servicer. Have your financial information handy, and be prepared to explain why you’re unable to make your payment.

*Federally backed mortgages include single-family homes that are owned or backed by one of the following agencies or entities: Fannie Mae, Freddie Mac, the Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA), the U.S. Department of Agriculture (USDA), or the U.S. Department of Housing and Urban Development. If you do not have a federally backed mortgage, you may still have relief options. Contact your loan servicer for assistance.

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