BROOKINGS, S.D. - With unemployment rates skyrocketing during the Covid-19 pandemic, many Americans are struggling to make ends meet. Fortunately, the U.S. Coronavirus Aid, Relief and Economic Security (CARES) Act includes a section to help homeowners and renters in this time of need.
For federally backed mortgage loans, the government has put a moratorium on foreclosures. This prevents your lender from starting or finalizing a foreclosure until June 30. However, you are still responsible for payments. If you are renting and your landlord has a federally backed loan for the property, tenants are protected from eviction and late fees until July 24, 2020.
Forbearance allows you to suspend or reduce the payments you make on your mortgage during times of economic stress. As of May 23, the forbearance provision in the CARES Act is valid until June 30, 2020.
“Forbearance is not free money, You will still owe the amount from late payments and accrued interest on your end balance.”
This temporary suspension or reduction in housing payments can make all the difference for those that need the money elsewhere during this crisis. Saboe-Wounded Head says in order to start the process, you must speak to your lender.
“All you need is a borrower statement and proof that you are current on your loan,” Saboe-Wounded Head says. “Once you reach an agreement make sure you get it in writing and you know how your payments will proceed at the end of the forbearance period.”
Those that don’t have federally backed mortgages might not be completely out of luck, “Many private loan providers are trying to offer assistance as well,” Saboe-Wounded Head adds. “Private loan providers aren’t legally required to offer the same assistance as the federal loan providers. If you are struggling to make payments, reaching out to your lender might still yield results.”
For more information, contact Lorna Saboe-Wounded Head, SDSU Extension Family Resource Management Field Specialist.
