There's so much new information emerging each day relating to COVID-19. Today, I want to specifically focus on some assistance available for those who will not be able to pay mortgage payments due to hardships caused by the virus.
CARES Act stands for Coronavirus Aid, Relief, and Economic Security. It includes some mortgage assistance. Before you take any action regarding your loan payments, you should contact your mortgage servicer.
What is Forbearance?
Forbearance is the action of refraining from exercising a legal right, such as enforcing the payment of a debt. Your mortgage servicer or lender can allow you to pause or reduce your mortgage payments for a limited period of time. The CARES Act addresses the following in relation to mortgages:
1) Eligible homeowners who are experiencing a financial hardship due to COVID-19 have the right to mortgage forbearance.
2) There is a temporary moratorium on foreclosure proceedings.
Who is eligible for mortgage forbearance?
If your loan is federally backed, you could qualify for these benefits. If you don't know if your loan is federally backed, these links should help:
This does not erase the debt!! Since the mortgage servicers have the right to immediately demand the total balance accumulated during the forbearance period, it's best to continue to pay mortgage payments if at all possible. If you are unable to make your mortgage payments, you should call your servicer to find out what your options are.