Legal Alert

CFPB, FHFA and HUD Announce COVID-19 Mortgage and Housing Assistance Website

by the Mortgage Banking Group
May 13, 2020

On May 12, 2020, the Consumer Financial Protection Bureau (CFPB), Federal Housing Finance Agency (FHFA) and U.S. Department of Housing and Urban Development (HUD) announced a joint COVID-19 mortgage and housing assistance website. Through the website, consumers can access information on the mortgage relief and renter protections provided for in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), as well as information on avoiding scams related to COVID-19.

Through the website, mortgage borrowers can access tools provided by Fannie Mae and Freddie Mac to determine if either agency owns their loan. Consumers also can access CFPB information on mortgage loan basics, such as understanding key mortgage terminology and reading the periodic mortgage statement, as well as information on what they should do after receiving a forbearance. The information addresses specific Fannie Mae, Freddie Mac, Federal Housing Administration (FHA), U.S. Department of Agriculture and U.S. Department of Veterans Affairs policies, and consumers are invited to check back for updated information.

In the statement announcing the website, FHFA advises that the payments that are missed because of a CARES Act forbearance “can be added to the normal monthly payments, paid back all at once, tacked on to the end of the loan, or the borrower can have the term of the loan extended.” Previously, FHFA, as well as Fannie Mae and Freddie Mac, made clear that lump sum payments would not be required at the end of a CARES Act forbearance. However, the borrower can opt to pay the missed payments in a lump sum at the end of the forbearance.

Echoing a prior statement, FHA also notes that borrowers will not be required to make lump sum payments at the end of a CARES Act forbearance. FHA also advises that it developed the COVID-19 Standalone Partial Claim, which may be available for borrowers who were current or less than 30 days delinquent as of March 1, 2020. FHA describes the Partial Claim as “a zero interest, no fee, junior lien on the borrower’s property that will become payable when the borrower sells their home, pays off their mortgage, or their mortgage otherwise terminates.” FHA also notes that there are other options available for borrowers who do not qualify for the Partial Claim, and provides ways for borrowers to obtain more information. We previously addressed the Partial Claim and other FHA loss mitigation options.

Copyright © 2020 by Ballard Spahr LLP.
(No claim to original U.S. government material.)

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This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

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