As the global pandemic continues to affect the lives and livelihoods of many of the nation’s families, organizations across the country are working hard to help American consumers protect and manage their finances. These days it’s more important than ever to make extra efforts to reach those who are struggling, to help them understand their options and navigate their choices.
In partnership with other federal agencies like HUD, the CFPB is reaching out to organizations like yours to encourage people who are struggling financially as a result of the pandemic to take control of their mortgage loans and request forbearance. A series of materials, including brochures, videos, and updated web pages, can help your organization brush up on forbearance provisions. We invite you to share the materials with the people you serve.
The CARES Act delivers help to homeowners who fall behind, when they work with their servicers
We want homeowners to know the facts about mortgage protections, and to take action to protect their homes and avoid foreclosure.
The CARES Act provides protections to many homeowners who are going through a financial hardship because of COVID-19. The protections apply to all federally backed and federally sponsored mortgage loans, which includes FHA, VA, USDA, Fannie Mae, and Freddie Mac loans. Mortgages not covered by the CARES Act may also provide similar forbearance options.
Many homeowners have begun to recover, but many are still struggling
While more than six million homeowners have opted into forbearance to help them deal with financial challenges, many have not. More than half a million homeowners who missed mortgage payments since the start of the pandemic have not yet opted into forbearance. And some homeowners are exiting forbearance and stumbling – more than 80,000 homeowners who did not extend their forbearance plans have subsequently become delinquent.
Forbearance is not automatic. Homeowners must request forbearance from their mortgage servicer. They should also be prepared to respond to any calls or messages from their mortgage servicer, to get the forbearance process started.
Some borrowers are behind on payments and have not asked for forbearance
About 500,000 homeowners who are behind on their mortgage payments have not yet asked their servicer for forbearance, even though many of them are likely eligible. Some federally backed mortgages have a December 31, 2020, deadline for requesting an initial forbearance. Homeowners facing financial hardships should ask for forbearance immediately, so they don’t lose that right.
Other borrowers are currently in forbearance and may need an extension
For many homeowners who received forbearance, the period is ending. Borrowers who are still experiencing hardship and have a loan covered by the CARES Act have a right to extend the forbearance period for up to 180 days for a total of 360 days. If they do not contact their mortgage servicer to request an extension or make a plan to resume payments, they risk becoming delinquent again and losing their homes to foreclosure, once federal foreclosure moratoriums expire on December 31, 2020.
Help the people you serve avoid foreclosure
We have developed materials that can support you when you talk to people in your community—in English and soon in multiple languages.
Guide for consumers on starting forbearance
Guide for consumers on extending or exiting forbearance
Guide for consumers on seven facts about forbearance
Searchable list of housing counselors in your area
For more detailed provisions of forbearance and the CARES Act, see our housing resources.