The CFPB and CSBS recently released a Consumer Relief Guide providing information to consumers dealing with financial hardships who may need assistance available under the CARES Act. The Guide provides consumers with information about the steps necessary to obtain relief, as well as the terms of mortgage payment forbearance plans, for federally backed mortgage loans, including conventional loans purchased or securitized by the GSEs, as well as FHA, VA, and USDA loans.
The guidance advises borrowers of their right to obtain mortgage forbearance in the form of a mortgage payment pause or temporary lowering of mortgage payments. Consumers are also reminded that foreclosure actions on loans federally backed by Fannie Mae, Freddie Mac and HUD, which includes single family FHA loans and reverse mortgage HECM loans, are frozen until June 30, 2020.
The Guide provides step-by-step instructions for borrowers seeking forbearance, beginning with contacting their mortgage servicers to see if they have a federally backed mortgage and discussing whether forbearance is the best course of action. With regard to credit reporting, consumers are also reminded that the CARES Act requires mortgage servicers to report an account as current if it was current at the time of the forbearance. However, if an account was delinquent before the COVID-19 emergency, that status remains on the consumer’s credit report.