Investor Update
May 6, 2020 

Source: HUD

Coronavirus Relief, and Economic Security Act (CARES Act) Mortgage Payment Forbearance

The CARES Act provides a mortgage payment forbearance option for all borrowers who, either directly or indirectly, suffer a financial hardship due to the novel coronavirus (COVID-19) national emergency.

Guidance for Assisting Borrowers
If a borrower can still make their mortgage payment, request that they continue to do so. However, if the borrower requests a forbearance, a servicer must give them the forbearance requested.

• No documentation is required to prove the hardship beyond the borrower asserting that they are suffering from a hardship.

• This relief is available to anyone who has a federally-backed mortgage, regardless of delinquency status.

Under the CARES Act, borrowers are entitled to request an initial forbearance of their monthly mortgage payments for up to 180 days, and may request up to an additional 180 days.

• Servicers must approve the forbearance for the amount and time that the borrower requests.

• Under the CARES Act, this is done at the borrowers’ request and for as long as they request, up to 360 days in total (initial up to 180 days and then up to another 180 days, if requested)

• Servicers should educate the borrower on the impact of longer forbearances. Servicers may discuss shorter initial forbearances with the borrower, such as 3 months for example, and work up or down depending on the needs and wants of the borrower.

• Servicers should ensure that borrowers understand that the missed payments must be repaid, although it may be paid back over time.

• Servicers should educate the borrower on what options will be available to the borrower to make repayments.

• Inform borrowers that they can contact you when their hardship is over or resume making their regular monthly mortgage payment to end the forbearance, and discuss what repayment options are available.

For full fact sheet, please click the source link above.