Illness, job loss and other problems related to the current coronavirus pandemic have left many homeowners and renters unable to pay their mortgages or monthly rent payments. Fortunately, the federal Coronavirus Aid, Relief, and Economic Security Act (CARES), which took effect in late March, provides some welcome relief to homeowners, renters, and the owners of multifamily housing. Here’s our guide to the law’s protections and financial relief for homeowners and renters during the coronavirus pandemic.
CARES protections for homeowners
CARES provides the right to seek forbearance from making mortgage payments for 180 days to homeowners who face financial hardship because of the coronavirus pandemic. This provision applies to any mortgage loan the federal government backs through programs such as Fannie Mae and Freddie Mac, as well as loans backed by federal departments such as Housing and Urban Development (HUD) and Veterans Affairs (VA). The new law allows the homeowner to request an additional 180 days of forbearance if needed or to have the forbearance period shortened if the financial hardship ends. CARES prohibits mortgage servicers from charging additional fees, penalties or interest during the forbearance period. To seek this relief, contact your mortgage servicer.
CARES also suspends foreclosures of federally backed mortgages until at least May 17, 2020. The law gives the government the authority to extend this time period if necessary.
Protections for owners of multifamily housing
Owners of properties with five or more rental units also can request forbearance for as long as 90 days if their mortgages are federally backed.
Protections for renters
The flip side of the protections for multifamily housing is that owners who request forbearance under CARES are prohibited from evicting tenants solely for not paying rent or charging them late fees during the forbearance period. To determine whether your apartment building qualifies for and has requested forbearance, ask your landlord or property management company.
Additionally, CARES provides a 120-day moratorium on evictions of tenants who cannot pay rent because of the coronavirus from properties that are part of federal government programs or that have a federally backed mortgage.
Other CARES financial protections
CARES offers additional financial relief for homeowners and renters during the coronavirus pandemic in the form of cash payments. The law provides a total of $300 billion in payments to American individuals and families to help stimulate the economy during the coronavirus pandemic. The size of your payment will depend on your income, but a family of four that brings in less than $150,000 a year can expect to receive about $3,400. CARES also provides an additional $600 per week in unemployment compensation over what applicants would typically receive.
Watch out for scams
Unfortunately, crises generally bring out fraudsters trying to make a quick buck. The coronavirus pandemic is no exception. Beware of foreclosure rescue fraud, where someone offers you mortgage relief but requests an upfront payment or asks you to sign away the title of your home. If someone other than your mortgage’s servicer contacts you, be wary and do not provide personal information.
Related – Mortgage Forbearance During Financial Crises
