CFPB Issues Guide for Mortgage Relief under CARES Act

The CFPB highlighted several relief options for consumers who are unable to pay their mortgage due to financial hardships caused by COVID-19.

As explained more fully on the CFPB website, the bureau identified two protections provided to homeowners with federally backed mortgages under the recently passed Coronavirus Aid, Relief and Economic Security Act ("CARES Act"):

• a temporary moratorium on foreclosures; and

• "a right to forbearance" for a homeowner struggling financially due to COVID-19.

For homeowners with federally backed mortgages, the CARES Act prevents lenders or loan services from initiating judicial or non-judicial foreclosure proceedings on such mortgages for 60 days after March 18, 2020. It also prohibits lenders and servicers from finalizing a foreclosure judgment or sale during this period.

For homeowners with federally backed mortgages who are experiencing financial hardship, the CARES Act grants them a right to forbearance for up to 180 days, with the option of requesting one extension for an additional period of up to 180 days. Homeowners must contact their loan servicers to request the forbearance.