Warning: Undefined variable $custom_content in /home4/comcompare/public_html/mortgagenews/wp-content/plugins/code-snippets/php/snippet-ops.php(582) : eval()'d code on line 10
In March 2020 the CARES Act was passed with a financial relief package of $2.2 trillion focusing on providing federal support for those affected by the pandemic.
A new program was included in the legislation that was designed to help those struggling to make mortgage payments: forbearance.
Where if borrowers were temporarily unable to cover the cost of mortgage payments they could apply to pause or reduce their regular payments and not face any additional financial penalties.
All the outstanding payments are not erased by forbearance, the borrower is still expected to repay the payments that they have missed, but during the tough times, this does not offer any respite.
Way to Request Mortgage Forbearance
Borrowers will not be granted forbearance automatically, they need to apply for support from their servicer.
A mortgage servicer is a company that granted the mortgage in the first place and who is sent payments each month.
The contact details of the servicer would be on the statement and they need to be informed about your inability to cover the monthly payment due to covid-19 and request them to help you in avoiding foreclosure.
If a borrower has a government-backed mortgage from HUD/FHA, VA, USDA, Fannie Mae, or Freddie Mac they will discuss relief options with the borrower.
There are other services that will provide the support on the basis that they will get the missed payments in the future.
Once the borrower has been granted forbearance they must continue to monitor their loan and ensure that they are able to restart making payments before the end of the forbearance period.
President Biden has agreed to extend the mortgage forbearance program
The mortgage forbearance was provided only for a year by the CARES Act, so the programme was to expire in March 2021.
Thanks to President Joe Biden who announced in February that he was extending the pandemic housing assistance by four extra months, so homeowners can request forbearance support until July.
So anyone yet to apply for the programme can do it until 30 June 2021 and take advantage of the mortgage relief scheme.
The February extension provided support for 2.7 million homeowners across the U.S. and 11 million recipients of government-backed mortgages if needed will be eligible for the assistance.
Reference Source: AS News
