#Servicer's of Federally backed Loans must grant Forbearance for two 180-day periods if needed
Great news for homeowners with Federally backed loans. CARES Act originally provided for 180 days for homeowner assistance Forbearance due to loss of income and or inability to work due to COVID. Current release confirms that the assistance may last as long as two consecutive 180 day periods which will provide relief past June should the homeowner still need assistance.
FOR IMMEDIATE RELEASE: June 4, 2020 MEDIA CONTACT:
Office of Communications Tel: (202) 435-7170
CFPB AND STATE REGULATORS PROVIDE ADDITIONAL GUIDANCE TO ASSIST BORROWERS IMPACTED BY THE COVID-19 PANDEMIC WASHINGTON, D.C. – The Consumer Financial Protection Bureau and the Conference of State Bank Supervisors issued joint guidance to mortgage servicer's to assist in complying with the Coronavirus Aid, Relief and Economic Security (CARES) Act provisions granting a right to forbearance to consumers impacted by the COVID-19 pandemic.
Servicer's of federally-backed mortgages, such as Fannie Mae or Freddie Mac, Department of Housing and Urban Development, Department of Veterans Affairs, or Department of Agriculture loans, must grant forbearance to borrowers with pandemic-related hardships that may last as long as two consecutive 180-day periods. Furthermore, additional interest, fees, or penalties beyond the amounts scheduled or calculated should be waived with no negative impact to the borrower’s mortgage contract during the forbearance.
Mortgage servicer's could violate the CARES Act or other applicable law and potentially cause consumer harm if they were to require documentation from borrowers to prove financial hardship, if they did not grant the forbearance once properly requested, or if they steered borrowers away from forbearance or misled them.
Last month, the Bureau and CSBS released a consumer guide to their relief options, which be accessed here: https://www.consumerfinance.gov/about-us/newsroom/cfpb-csbs-consumer-guide-mortgage-relief-options/ To read the guidance click here: https://files.consumerfinance.gov/f/documents/cfpb_csbs_industry-forbearance-guide_2020-06.pdf. The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by regularly identifying and addressing outdated, unnecessary, or unduly burdensome regulations, by making rules more effective, by consistently enforcing federal consumer financial law, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.
Source: Consumer Finance.gov
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