If you’re currently feeling the stress of affording your
mortgage payment, or if you know someone who is, there’s still time to get
help. For homeowners experiencing financial hardship this year, the CARES Act
provides mortgage payment deferral options, creating much-needed relief in
these challenging times.
It’s important, however, to understand how forbearance
works. It’s not automatic. You need to take action now and apply for the
program before these options expire.
A study by the Urban Institute determined:
“Approximately 400,000 homeowners who became delinquent
after the pandemic began have forgone forbearance and become delinquent. These
borrowers may not know they are eligible for forbearance.”
Thankfully, there’s still time to apply for forbearance,
even if you’re just learning about it now. Doing so may be the game-changer you
need to stay in your home, just when you need it most. Mike Fratantoni, Senior
Vice President and Chief Economist at the Mortgage Bankers Association (MBA),
“The increase in new forbearance requests may be the result
of additional outreach to homeowners who had previously not taken advantage of
If you need to apply for forbearance but aren’t sure how to
begin the process, the Consumer Financial Protection Bureau (CFPB) published 5
steps to follow when requesting mortgage forbearance:
1. Find the contact information for your servicer
Look at your mortgage statement to find the phone number for
your servicer (the company you send your mortgage payment to every month). The
Consumer Financial Protection Bureau encourages you to use the number on your
statement to avoid scams.
2. Call your servicer
Explain your situation so your servicer can determine your
best course of action. Be sure to ask any questions you have about the process.
3. Ask if you’re eligible for protection under the CARES
The CARES Act protects homeowners with federally backed
loans (FHA, VA, USDA, Fannie Mae, and Freddie Mac). In addition, some private
servicers are also providing forbearance programs.
4. Ask what happens when your forbearance period ends
Depending on the plan available to you, there are different
options you may be able to consider. Your servicer will help you get a better
understanding of what’s available.
The CFPB also recommends asking questions like:
What happens to the payments I miss?
What are my repayment options?
When will repayment be due?
Are there any fees?
5. Ask your servicer to provide the agreement in writing
A written agreement allows you to see exactly what type of
program you’re agreeing to. It also helps you make sure it matches what you
discuss with your provider over the phone.
Help is out there for homeowners in need, but it’s important
to apply now while this benefit is still available. The Consumer Financial
Protection Bureau says: don’t wait, forbearance is not automatic. It must be
requested. Reach out to your mortgage provider today so you can get the
assistance you need to protect the hard-earned investment you’ve made in your