10 Apr CARES Act Provides Mortgage Relief for Homeowners
COVID-19 is disrupting our lives in every way imaginable, prompting people to ask, “What kind of help is out there for me?” The federal government has responded with The CARES (Coronavirus Aid, Relief and Economic Security) Act, offering $2 trillion in financial relief to individuals and businesses. One of its provisions affects real estate and homeowners, and here we take a closer look.
Postponement of Mortgage Payments
Homeowners catch a much needed break. You may be hearing the terms “Mortgage relief” and “Mortgage Forbearance”, which mean the same thing as they relate to The CARES Act. In short, servicers of federally backed mortgages, such as Fannie Mae, Freddie Mac, HUD, VA and USDA, are required to defer mortgage payments at the request of the borrower for up to 360 days. In fact, a borrower does not have to prove hardship, and no additional fees, interest, or penalties can be levied.
Foreclosures Put on Hold
The new law also stipulates a foreclosure grace period. Mortgage companies providing federally-backed loans can’t initiate the foreclosure process for at least 60 days from March 18, 2020.
Eviction Reprieve for Renters
Renters facing eviction now have more room to breathe. According to The CARES Act, landlords with mortgages from HUD, Fannie Mae, Freddie Mac, and other federal entities must wait 120 days from the passing of the bill on March 27, 2020 before pursuing eviction for their tenants. In addition, landlords are prohibited from assessing any fees or penalties for outstanding rent payments.
Enhanced Housing Assistance
$3 billion is being allocated toward rental assistance to benefit 4.5 million low-income households in federally-assisted housing and $4 billion to aid individuals and families experiencing homelessness.