How does the CARES act affect my federally backed home mortgage?
The CARES Act/ Coronavirus Stimulus stopped all foreclosures of “federally backed” mortgages until May 17, 2020. These are Federal Housing Administration (FHA), Veterans Administration (VA), Department of Agriculture (USDA), Housing and Urban Development (HUD), Fannie Mae & Freddie Mac mortgage loans.
I wasn’t in foreclosure, but I can’t afford my mortgage payments because I’m not working. How does the CARES Act help me?
Borrowers with federally backed mortgages that have been financially impacted by COVID-19 can request up to 180 days forbearance on their mortgage. That forbearance allows you to pause or reduce your mortgage payments. This can be extended for an additional 180 days (360 days total) if requested. The mortgage service is required to grant the forbearance, and the borrower won’t not be fined, penalized, or charged interest.
Unfortunately the CARES Act doesn’t forgive amounts past due, or bring the mortgage current. It also doesn’t apply to mortgages owned by private lenders, such as banks. Fortunately, a Chapter 13 Bankruptcy provides a way for borrowers to stop foreclosures and catch up past due mortgages over a period of 5 years.
Our Experienced Nebraska Bankruptcy Attorneys Are Here To Help
If you have questions about how the Coronavirus pandemic may impact your financial situations, call the experienced bankruptcy attorneys at Steffens Law Office at 308-872-8327, or fill out our form to contact us today.