If COVID-19 has resulted in wage loss in your household, impacting your ability to make payments on your monthly rent or mortgage, all is not lost. All of us are feeling the effects of the coronavirus. Many cities and states have responded in different ways to the situation.
If you are unable to make your housing payments, here is how the CARES Act can help:
Temporary Moratorium on Eviction Filings
For tenants in federally backed housing, the CARES Act provides 120 days of eviction relief starting March 27, 2020. This means you will not be served an eviction notice until July 25, 2020. Also, the notice must give you at least 30 days to leave the property.
During the 120-day evocation moratorium, your landlord is not permitted to impose any late fees, penalties, or any other charges for late payments. Also, your landlord may not issue a notice to vacate until after the expiration of the Moratorium Period. That being said, this does not excuse you from paying your rent.
The temporary moratorium on eviction filings pertains to any federally backed rental housing, provided that your housing is (1) defined in Section 41411a of the Violence Against Women Act of 1994; (2) in the rural housing voucher program under section 542 of the Housing Act of 1949; or (3) a Federally backed mortgage loan or a Federally backed multifamily mortgage loan.
Also, the CARES Act provides the Departments of Housing and Urban Development (HUD) with an additional $17.4 billion in funding.
As eviction moratoriums differ from state to state, here is a link to Millionacre’s article “Cities and State That Have Paused Evictions Due to COVID-19” by Deidre Woollard.
Federal Backed Mortgages.
There are two protections set in place by the CARES Act for homeowners with federally backed mortgages:
(1) Your lender, or loan servicer, may not foreclose on you for 60 days after March 18, 2020, as the CARES Act prohibits lenders and servicers from beginning a judicial or non-judicial foreclosure against you and from finalizing a foreclosure judgment or sale during the 60 days.
(2) If you experience financial hardship due to the coronavirus pandemic, you have a right to request a forbearance for up to 180 days. You must contact your loan servicer to request this forbearance. You also have the right to request an extension for up to another 180 days. There will be no additional fees, penalties, or additional interest added to your account. You do not need to submit additional documentation to qualify, other than your claim to have a pandemic-related financial hardship.
Is my Mortgage Federally Backed?
To be eligible for the protections under the CARES Act, your mortgage must be federally backed. To know is your mortgage is federally backed, you need to figure out who your mortgage servicer is and contact them. Your mortgage servicer is who you make your monthly payments to. Email, call or send a written request to your servicer to ask who owns your mortgage and to ask if your mortgage is federally backed. Your servicer is obligated to tell you, to the best of its knowledge, the name, address, and telephone number of who owns your loan.
What is Mortgage Forbearance?
Forbearance is when your mortgage servicer, or lender, allows you to suspend, or reduce, your mortgage payments for a limited period. But remember, forbearance doesn’t mean your payments are forgiven or erased. You are still required to repay any missed or reduced payments in the future.
As loans differ from person to person, there may be different forbearance options. So, make sure you understand how your forbearance will be repaid. There can be different forbearance programs or options, depending on the type of your loan. Contact your mortgage servicer, or lender, for any clarifications.
When, or if, your income is restored, please reach out to your servicer to resume payments. At the end of the forbearance, you can either pay all of your missed payments at once, spread out your missed payments over a series of monthly payments, or have your missed payments added as an additional lump sum at the end of your mortgage.
Other Relief Resources
To get updates about COVID-19, you can go to the Centers for Disease Control and Prevention (CDC) website. The CDC has made a map to inform the public on confirmed COVID-19 cases. For information about your community, the CDC has linked resources for all 50 states, 8 US territories and freely associated states, and the District of Columbia.
211.org is a United Way sponsored website that provides an easy-to-use service. It allows you to search your zip code to find resources to help with your rent and mortgage as well as any other essential services. But be aware that financial assistance is not available through every 211.
Caiola, Eugene Paul. “CARES Act – Temporary Moratorium on Eviction Filings.” JD Supra, www.jdsupra.com/legalnews/cares-act-temporary-moratorium-on-99459/.
“Guide to Coronavirus Mortgage Relief Options.” Consumer Financial Protection Bureau, 24 Apr. 2020, www.consumerfinance.gov/about-us/blog/guide-coronavirus-mortgage-relief-options/.
Probasco, Jim. “Renters: How to Get COVID-19 Rent Relief.” Investopedia, Investopedia, 22 Apr. 2020, www.investopedia.com/renters-how-to-get-covid-19-rent-relief-4800858