On March 31, the Consumer Financial Protection Bureau (“the Bureau”) published an online guide (available here) for consumers seeking financial relief options for mortgage and rent payments in light of the unfolding coronavirus (“COVID-19”) pandemic, with a particular focus on the new federal Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The guide offers a consumer-friendly explanation of the relevant provisions, focusing on: (1) what major mortgage relief options are available, (2) who qualifies, (3) how to obtain relief, and (4) what to do upon receiving relief.
Under the CARES Act, relief is available only to consumers whose mortgages are federally owned or otherwise backed by a designated federal agency, and the site provides several links for consumers to research whether a mortgage is owned or back by one of these agencies.
The guide also explains the key categories of relief available to mortgage borrowers, which include foreclosure and forbearance relief. First, there is a blanket moratorium on beginning a judicial or non-judicial foreclosure, or finalizing a foreclosure judgment or sale, during the 60-day period beginning on March 18. Second, for borrowers who experience financial hardship due to the COVID-19 pandemic, they have a right to request a forbearance for up to 180 days, plus the right to request one extension for another up to 180 days. During the forbearance period, there will be no additional fees, penalties, or additional interest (beyond scheduled amounts) added to the account. There is a requirement to submit documentation to qualify other than to claim a pandemic-related financial hardship.
For borrowers who are granted relief, the Bureau provides recommendations for account monitoring, including keeping written documentation to document the relief process, monitoring monthly mortgage statements for granted relief, and monitoring credit reports for changes in reporting arising out of granted relief.
For consumers renting from an owner with a federally owned or backed mortgage, the CARES Act provides for a similar suspension or moratorium on evictions. The moratorium lasts for 120 days beginning on March 27, during which time the landlord cannot evict tenants for nonpayment of rent. After the 120-day period is up, the landlord cannot require the tenant to vacate without providing a 30-day notice to vacate.
The Bureau’s guide also reminds consumers to consider relief from other pre-existing and supplemental forms of assistance programs, such as state and local government resources, housing counselors approved by the United States Department of Housing and Urban Development, reputable credit counseling organizations, and attorneys.