What Is the CARES Act?
While many states are navigating various reopening phases to resume operations suspended during the novel coronavirus pandemic, the road to economic recovery in America is looking to be long and challenging. With the unemployment rate in the United States at its highest rate since the Great Depression, millions of people who have been left with no steady source of income are forced to choose between affording basic necessities such as food and rent.
To help those who have experienced financial setbacks due to the coronavirus pandemic, the government has enacted the CARES Act designed to provide financial relief options to those currently struggling to make rent and mortgage payments on time.
How the CARES Act Helps
The CARES Act, or the Coronavirus Aid, Relief, and Economic Security Act, is the latest effort by the federal government to mitigate the negative financial impacts that have resulted from the pandemic. This act in particular is designed to shield those who are making payments toward mortgages that are subsidized by the federal government.
The act includes two primary forms of defense for homeowners:
- For the first 60 days following March 18, 2020, lenders were unable to enact foreclosures or judgments pertaining to foreclosures.
- Forbearances can be requested by homeowners from lenders to provide an extension on deadlines for payments. These extensions can last from one to 180 days. Another extension can be requested that includes the same previously mentioned range of delay.
What Is Forbearance?
Often a common request made by those who currently do not have enough money to make payments, forbearance is an option that allows you to make lower payments (or no payments at all) if your lender agrees to the request. Things to consider when discussing forbearance with your lender:
- The length of the forbearance period
- The amount of the payment required during the forbearance period
- Whether the lender will report the forbearance to the credit bureaus
- How you will repay the lender once the forbearance period ends
The CARES Act applies to the following federally subsidized mortgage loans:
Even if you are not making payments toward federally subsidized loans, forbearance opportunities may still be available. The best way to learn about your options is to contact your mortgage lender directly.
A Mortgage Lender Who Cares
Since having a mortgage in forbearance can be an obstacle when refinancing a current mortgage or trying to purchase a new home, it is important to seek guidance from a mortgage professional who can help you avoid potential issues. For homeowners in the Central Florida area looking for mortgage management assistance as a result of the coronavirus pandemic, Butler Mortgage is here to help. For over 25 years, we have been dedicated to providing valuable guidance and advice related to mortgage lending needs for all of our clients. For more information about personalized mortgage loan solutions and forbearance information, call us at 407-931-3800 or fill out our free consultation form online.