Foreclosures and the COVID-19 Coronavirus Crisis

Updated on 4/1/2020 10:45 a.m.

 

Federal CARES Act and foreclosure

The new federal CARES Act provides some help if you have a mortgage that is federally backed. This includes Fannie Mae, Freddie Mac, Federal Housing Administration (FHA), United States Department of Agriculture (USDA), and Veterans Affairs (VA) home loans. You can use the following information to find out if you have a federally backed mortgage:

  • Fannie Mae and Freddie Mac have loan look-up tools. You can see if they own your mortgage.

  • To determine if your loan is FHA-insured, look for: an FHA case number on your mortgage document, specific language in the mortgage and note forms, or an FHA premium on your mortgage statement. In some cases, loans may have been stripped of their FHA-insured status. Call the Department of Housing and Urban Development (HUD) National Servicing Center at 877-622-8525 if you have questions.

  • A VA-guaranteed loan has specific language in the note and mortgage identifying it as a VA loan. You will also see fees paid to the VA noted in closing documents.

  • If you have a mortgage directly extended by the USDA Rural Housing Service (RHS) you may be very familiar with the agency. However, if you have a privately serviced USDA RHS-guaranteed loan, you may not know that. If you think you may have a RHS-guaranteed loan, ask your mortgage servicer / lender to review your closing documents for you.

Under the CARES Act, a mortgage servicer / lender of federally backed mortgage loan may not:

  • start a judicial or nonjudicial foreclosure process

  • move for a foreclosure judgment

  • order a sale, or

  • execute a foreclosure-related eviction or foreclosure sale

for at least 60 days beginning on March 18, 2020. This applies even if you do not have a hardship due to COVID-19. See § 4022(c)(2).

If you have a federally backed mortgage loan and you have financial hardship due to COVID-19, you can ask for and get a forbearance (postponement) of mortgage payments for up to 180 days. You can then ask for and get additional forbearance for up to another 180 days. During the forbearance period, no fees, penalties, or interest will accrue on your mortgage account beyond the amounts scheduled or calculated. It will be as if you made all payments on time and in full under the terms of the mortgage contract. This appears to apply during the COVID-19 emergency or until December 31, 2020, whichever is earlier. See § 4022(b), (c)(1).

If you do not have a federally backed mortgage

If you are impacted by COVID-19 and you are not able to make mortgage payments, contact your mortgage servicer / lender. If you can get more time to pay, be sure to ask:

  • if you will be charged late fees, penalties or interest

  • if postponed payments will be recorded in your credit report

  • if you need to send any documents to show you are experiencing hardship due to the COVID-19 crisis.

 

Updated: Apr 06, 2020