Forbearance and Foreclosure Moratorium: CARES Act Section 4022
180 Day Default Forbearance
If you can pay your mortgage, you should usually pay your mortgage. Conversely, under the provisions of Section 4022(b)(2), a borrower with a federally-backed mortgage loan “experiencing hardship due, directly or indirectly, to the COVID-19 emergency” may request a forbearance to the borrower’s servicer and affirm that the borrower is experiencing such hardship. The statute provides that upon request such forbearance “shall be granted for up to 180 days and shall be extended for an additional period of up to 180 days at the request of the borrower.” During the forbearance period, the lender agrees not to initiate foreclosure.
Proof of Hardship Cannot be Required
Mortgage servicers are not permitted to require any additional documentation beyond the basic information required under Section 4022(b), and are not permitted to assess any additional fees, penalties, or interest.
Repaying your Forbearance Agreement
The method of repayment varies depending on your loan offered (Fannie Mae, Freddie Mac, FHA, VA, USDA loans) and their options. Not all borrowers will be eligible for all options. You should take steps to be aware of how these programs work and what you can expect in terms of repaying these amounts. Scams. (1) Charge a high up-front fee for their services; (2) Promise to get you a loan modification; (3) Ask you to sign over your property title; (4) Ask you to sign papers you don’t understand; (5) Tell you to make payments to someone other than your servicer; (6) Tell you to stop making payments altogether; (7) Promise you payments in connection with providing credit card numbers and other personal information.
Knowing your Rights
If you receive a Forbearance Agreement from your mortgage company offering deference on monthly mortgage payments, call the lawyers of Grossbart, Rosenberg, and Portney to review the agreement with you. Mortgage Litigation and Bankruptcy are two key focuses of our firm and we are here to help. There are many ramifications you should consider before accepting an agreement. If you wish to retain our services, we can be reached at 410-837-0590 or by email at email@example.com