A federal law has established two protections for property owners with federally or Government Sponsored Enterprise (GSE) backed mortgages (FHA, VA, USDA, Fannie Mae, Freddie Mac). Find out more about these options and if they're right for your circumstances.
If you don’t have a federally GSE or federally backed mortgage, you may still have some relief options from your state or through your mortgage loan servicer or. Find out who owns or services your mortgage.
Relief for all federally or GSE-backed mortgages
There are two protections for homeowners with federally or GSE-backed (Fannie Mae or Freddie Mac) or funded mortgages under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and guidance from federal agencies and the GSEs:
For federally backed loans, your loan servicer or lender should not foreclose on you until after February 28, 2021. Loans that are backed by Fannie Mae or Freddie Mac can't foreclose until after January 31, 2021.
Those experiencing financial hardship as a result of the coronavirus pandemic, you have a right to receive a maximum of a 180 day forbearance. In addition, you can also request and receive an extension for another 180 days (for a total of up to 360 days).
You should contact your loan servicer and ask for a forbearance. You won't be charged any additional fees, penalties or additional interest (beyond previously contracted amounts) added to your account. The only additional documentation you need to submit to qualify is your claim of pandemic-related financial hardships. Keep in mind some federally backed mortgages have a February 28, 2021 deadline if you need to request an initial forbearance. If you are going through a financial hardships, you should request a forbearance as soon as possible before the deadline.
Forbearance is when your mortgage servicer or lender allows you to pause (suspend) or reduce your mortgage payments for a limited period of time while you try to get back on your feet. The CARES Act gives homeowners the right to have all mortgage payments completely paused for a specified time period.
Forbearance doesn’t mean you don't have to pay what you owe. You still have to repay any missed or reduced payments in the future. Once forbearance is over, you will be contacted by your servicer and discuss how the missed payments will be repaid. Ask about the various programs that are available.
Make sure you understand how the forbearance will be repaid. There are different forbearance programs options, depending on the type of loan you have. For instance, if you have a Fannie Mae, Freddie Mac, FHA, VA, or USDA loan, you won’t have to pay back the amount that was suspended all at once—unless you can afford to. If you are back on your feet before the end of your forbearance period, contact your servicer and start making payments again as soon as possible.
If you want to learn more If forbearance is an option, read a guide to help you make the best decision based on your situation.
Foreclosure is when the lender takes back the property after the homeowner fails to make several required payments on a mortgage. This processes differ depending on the state. Federal law generally prohibits the servicer from making the “first notice or filing” to start a judicial foreclosure or non-judicial foreclosure until a borrower's mortgage loan obligation is more than 120 days delinquent. (12 C.F.R. § 1024.41). There can be exceptions depending on your forbearance or loss mitigation program. Foreclosure moratoriums suspend or stop foreclosure.
For federally backed loans, your lender or loan servicer cannot foreclose on you until after February 28, 2021. For loans backed by Fannie Mae or Freddie Mac, they cannot foreclose on a mortgagor until after January 31, 2021.
As of Specifically March 18, 2020, the CARES Act and the guidance from Fannie Mae and Freddie Mac, FHA, VA, and USDA specifically prohibit lenders and servicers from starting a judicial or non-judicial foreclosure, or finalizing a foreclosure judgment or sale. Some states and local governments have temporarily stopped foreclosures. Check your state’s government website more information.
If you want to learn more Your servicer or lender can work with you to avoid foreclosure. The Homeowner’s Guide to Success discusses the federal law and what your options are if you can’t pay your mortgage.
What to do next
You should find out who owns or backs your mortgage to see if one of these mortgage relief options are available to you.