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CARES ACT: Protections for Homeowners
Letter to Bank of America referencing HR 748 public law posted 04/20/2020
CARES Act Protections for Homeowners The CARES Act provides important mortgage relief and protections for eligible single-family borrowers with federally backed residential mortgages. It prohibits a lender or loan servicer from foreclosing on an eligible homeowner for a period of no less than 60 days, beginning March 18, 2020. 2 It also gives single-family homeowners who are facing a hardship due, directly or indirectly, to the pandemic the right to up to 360 days of mortgage forbearance –essentially allowing them to hit pause on their mortgage payments during the coronavirus disease 2019 (COVID-19) outbreak and crisis and to make up those payments later. 3 These protections cover an estimated 70% of mortgages on single family homes, and provide an important lifeline to ensure that Americans who may have lost jobs or income during this crisis do not also lose their homes.4
CARES Act,Sec. 4022-4023 The CARES Act also provides for forbearance protections for some federally backed multifamily residential properties.
Your Company's Responsibility to Inform Homeowners of Their Rights
Most homeowners deal directly with their mortgage servicers, so many may be unaware that the federal government owns, guarantees, or insures their loan or that their loan is backed by Fannie Mae or Freddie Mac. Without this knowledge, homeowners who are experiencing financial hardship due to the COVID-19 pandemic may not realize that they can request these protections to help ease their financial burdens during the crisis, or may not know how to do so. In order to receive mortgage forbearance, a homeowner must formally request such protection from their mortgage servicer. And if a lender attempts to initiate or complete a foreclosure in violation of the CARES Act, a homeowner must be aware that they qualify for protection if they hope to take action to remain in their home. Both of these protections place the burden of information and action on borrowers.
Reference Resource: Letter