CARES (Coronavirus Aid, Relief, and Economic Security) ACT protects homeowners with mortgages.
Q1: If a homeowner is encountering hardship due to COVID-19, can they not pay the monthly mortgage?
ANSWER: Yes, based on the mortgage type.
Q2: What are the mortgage type(s) that provides protection?
ANSWER: Federally back mortgages
Q3: Do I have to know the mortgage type?
ANSWER: No, call your lender or the service provider they will let you know.
Q4: How long do I get not to pay the mortgage?
ANSWER: For the first 180 days. At the end of the first 180 days, if a homeowner is encountering hardship a second 180 days of extension is provided
Q5: What do I need to do?
ANSWER: All you need to do is call your lender and let them know that you want to exercise your right for forbearance.
Q6: Do I need to show or provide any documentation?
ANSWER: No, the act provides the RIGHT FOR FORBEARANCE i.e., the lender should not ask any question but to give an extension if you have the right mortgage type.
Q7: Would my loan terms change?
ANSWER: Though the interest rate won’t change, you may accrue interest on the principal, and your pay off time may get extended.
Q8: Can I pay a smaller amount?
ANSWER: Yes, talk to your lender.
Q9: How to confirm?
ANSWER: When talking with your lender, make sure you get everything in writing.
Q10: Will it affect credit score?
ANSWER: No
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