Cares Act Mortgage Forbearance: What You Need To Know
UPDATE: Since this video was released, federal regulators have made it clear that if you receive a forbearance under the CARES Act, your mortgage servicer cannot require you to repay your skipped payments in a lump sum once the forbearance period ends. Also, wait times for most call centers have eased, we encourage you to contact your servicer to learn more.
How To Request Mortgage Relief
Your mortgage servicer is likely not the same company that set up your loan. Not all mortgages offer the same relief, and there may be state or local assistance you can tap. Dont rely solely on the knowledge of the agent to whom you speak. Do some research of your own online. Youll find some links to help you find programs that may be tailored to suit your mortgage needs. Do not rely on the information from your loan servicer, its best to directly contact your mortgage company to get the best results.
How Homeowner Assistance Funding Works
Treasury is authorized under the American Rescue Plan to provide a HAF award to:
- States,
- Tribes or their TDHEs
- Department of Hawaiian Home Lands
HAF programs distribute assistance to eligible homeowners to cover qualified expenses related to mortgages and housing.
Depending on the program, homeowners may use the HAF assistance for expenses such as, mortgage payments , property taxes, homeowners insurance, homeowners association fees, utilities , internet service, and certain home repairs.
Find out more information about how HAF programs work on the interagency housing portal hosted by the Consumer Financial Protection Bureau .
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Mortgage Stimulus Programs Faq
Is there really a mortgage refinance relief program?
Two mortgage relief programs HIRO and FMERR have been put on hold because homeowners currently have so much equity that theres little need for relief refinancing. However, if you do need mortgage assistance, you still have options. Some Congress mortgage stimulus programs enacted during Covid, such as forbearance, are still available. And homeowners with FHA, VA, or USDA loans can often refinance a high-LTV loan using Streamline Refi programs backed by the federal government.
Is there a government mortgage relief program?
The CARES Act and subsequent American Rescue Plan have provided mortgage relief during the Covid-19 pandemic. These programs do not refinance your mortgage but let you postpone repayment while keeping your loan active. The CARES Act also created a temporary moratorium on foreclosures and renter evictions.
Does Biden have a mortgage stimulus program?
Biden has proposed several stimulus programs to help with homeownership costs. In terms of mortgage relief, he recently enacted a measure to provide mortgage assistance to homeowners with federally backed FHA, VA, and USDA loans. Under this program, qualified borrowers can modify their mortgages to get a lower interest rate and potentially reduce their loan payments by up to 25 percent. Contact your mortgage servicer to learn whether youre eligible for a loan modification.
Is the Freddie Mac Enhanced Relief program legit?
How A Mortgage Refinance Relief Program Works

The idea behind a mortgage relief refinance program is to help homeowners lower their mortgage rates. In turn, their monthly payments become more affordable.
Relief refinance incentives have helped millions of homeowners avoid mortgage delinquencies and even foreclosure.
But why are relief refinance programs necessary in the first place?
Well, typically, homeowners cant refinance unless their mortgage is below a certain loan-to-value ratio . That means they need a minimum amount of home equity and borrowers who made a very small down payment when they purchased the home, or whose home values have fallen, might not meet the threshold.
Luckily, a relief refinance solves this problem.
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Is There Really A $3700 Mortgage Stimulus Program
Those $1,200 pandemic stimulus checks have ended, and are unlikely to return.
So what are all these ads for a new homeowners stimulus, that could provide more than $3,700 to pay your mortgage?
The ads are all over social media right now, many saying a new 2021 mortgage relief program is giving back $3,708 in savings to homeowners.
The headline on another says a new stimulus program is giving relief.
It even includes a picture of a TV anchorwoman reading this as breaking news.
But what TV station does she work for? It looks like CNN, but theres no logo on the screen.
The Better Business Bureau and AARP are warning about all these ads, saying there is no federal mortgage stimulus program.
States have some individual programs to help homeowners in distress, but that is not this.
And from the doesnt that stink file, what happens when you click to apply.
We tried to sign up, and got a series of screens asking for our address, homes value, and how much we owe on it.
In the end, it turned out to be a pitch for a refi program, which might save you $3,000, or not.
Its not a scam, but its not a $3,000 stimulus program, and that stinks.
The Better Business Bureau says there is no Congress-approved relief program for mortgage payments for Americans.
Finally, be careful of any offer for government help that takes you to a website that does not end in dot gov.
That way you dont waste your money.
Dont Just Stop Making Payments
If you are in a distressed situation, you may have more options than you realize. Whether your loan is backed by the federal government or a private lender, the one thing you should not do is to just stop making payments. You must contact your lender or servicer to let the company know you are having trouble making payments. Failure to contact your lender could result in many negative consequences such as additional charges, delinquent credit reports, and ultimately, possible foreclosure and eviction.
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Why You Can Trust Bankrate
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. Weve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.
Bankrate follows a strict editorial policy, so you can trust that were putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.
Our mortgage reporters and editors focus on the points consumers care about most the latest rates, the best lenders, navigating the homebuying process, refinancing your mortgage and more so you can feel confident when you make decisions as a homebuyer and a homeowner.
No Extra Penalties Interest Or Late Fees
During any forbearance period granted to you, your servicer cannot charge any penalties, interest, or fees that would not have been charged if you had made your payments on time and in full. Landlords may not charge tenants any fees or penalties for late payment of rent during any forbearance period granted to the landlord.
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Stimulus Money Is Available To Certain Homeowners
Under the terms of the American Rescue Plan Act, homeowners can become eligible to receive stimulus money from the Homeowners Assistance Fund provided certain criteria are met. They must:
- Have an income that doesnt exceed 150% of the area median income
- Have experienced financial hardship after Jan. 21, 2020 and be able to provide proof of the hardship. Examples include healthcare expenditures or a job loss
- Have a mortgage balance below $548,250 as of 2021
For eligible borrowers, the money can be used for many different home-related expenses including:
- Mortgage payments
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Mortgage Assistance Programs: Covid
Several mortgage relief options may be offered. The type of loan you have, the owner or investor requirements of those backing the loan, and the servicer all factor in when determining the agreement youre offered.
- Pause Payment Agreement: Your payments are suspended for up to 180 days but must be paid back in full when payments resume.
- Mortgage Payment Reduction: The servicer agrees to reduce the monthly payment for several months. Once full payments resume, you have a specific period of time to repay the amount that was reduced. Interest accrues until the delinquent amount is paid in full.
- Payback at End of Mortgage: The amounts that were paused are tacked on to the end of your mortgage loan period. Or, the lender issues a second loan for the amount delinquent and considers the repayment a balloon payment. Both loans are due in full at the end of the mortgage period or when the property sells.
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How To Request Forbearance
As a homeowner with a federally backed mortgage loan, you will need to contact your loan servicer to request forbearance. You do not need to submit extensive documentation, mainly only affirmation of your financial hardship, which you can do over the phone. Your initial forbearance can be for up to 180 days. Depending on when your initial forbearance began, you can extend forbearance an additional 180 or even 360 days.
Landlords of multifamily units must have been current on payments as of Feb. 1, 2020, to be approved for forbearance relief. If applicable, landlords should submit an oral or written request to their servicer, who can approve the initial 30-day forbearance, with subsequent extensions of up to an additional 60 days.
Attention Holiday Shoppers: Buy Now Before It Is Out Of Stock

The $1.9 trillion stimulus package that President Joe Biden signed into law Thursday includes close to $50 billion in housing assistance to struggling renters, homeowners and people experiencing homelessness.
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Pros And Cons Of Refinancing Second Mortgages
here are a number of pros and cons to consider when it comes to refinancing second mortgages.
Pros:
- Change your existing loan rate and term: If interest rates have dropped, you may want to consider refinancing to take advantage of new rates.
- Lower monthly payments: Lower interest rates may also mean lower monthly payments on your house.
- Allow you to switch to a fixed interest rate: This is good for those who are at a variable rate and would want a fixed rate due to rising interest rates.
- Consolidate debt: Refinancing your second mortgage will give you access to more funds, depending on your homes equity, that you can then use to consolidate high-interest debt, such as credit card debt or student loans.
Cons:
- Consider the extended life of the loan: If you refinance a second loan, you will usually be prolonging the life of the loan and, therefore, be making payments longer.
- Cost: Refinancing can be costly, as you will need to pay, at minimum, an appraisal fee, as well as closing costs.
Summary
Refinancing a second mortgage may be the right option for you if you are seeking a more favorable interest rate or lower monthly mortgage payments. Refinancing a second mortgage is similar to refinancing a first mortgage you will want to have a good credit score, employment history, and debt-to-income ratio to qualify for the best interest rates.
Talk to an expert before pursuing a refinancing of a second mortgage to ensure that it is the best choice for you.
Qualifications For A Mortgage Stimulus
Related Articles
Youve been laid off from your job, and you must use the money you saved for a family vacation, a new car or even retirement to feed your family and pay overdue bills. Youre now contemplating applying for a mortgage stimulus package that provides temporary relief from your biggest monthly payment without the fear of losing your home. The coronavirus has affected millions of Americans who never thought theyd be in such a dire financial condition. The United States Congress has already enacted programs that provide relief until the pandemic has passed and life returns to normal.
Tip
If you already have mortgage forbearance, you can apply to extend your mortgage stimulus relief for another 180 days.
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What Happens To The Overage On A Homeowners Insurance Claim
The overage on your claim check is yours to keep. You have paid your premiums so that you may receive that money, and the money is yours once it is turned over by the insurance company. You may need every dollar to repair your home or replace personal belongings, but it is possible you may repair or replace everything for less money.
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Preparing Your Request For Forbearance
Before contacting the mortgage servicer, be prepared to answer a host of questions, such as:
- What are your options to temporarily reduce or suspend your payments?
- Is loan modification an option?
- Will late fees be waived?
- What do I do when my forbearance period ends?
- What payment options do I have at the end of the forbearance period?
- What restrictions and requirements will apply at the end of the forbearance period?
- Will interest be charged on the as-yet-unpaid mortgage payments during forbearance?
- Do I have any rights if I disagree with the mortgage relief determination?
If you were up to date on your payments prior to the COVID crisis and your employment or income status has changed drastically since, you will probably be granted mortgage forbearance. Fannie Mae writes that your credit score will not be affected if you make consistent payments according to the agreed-upon plan.
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Mortgage Rates Are Expected To Rise And Put A Damper On Your Refinancing Plans
Mortgage rates bottomed out at the end of last year, and have inched upward since then. Many expect to see mortgage rates continue to rise this year.
Our forecast going up to around 3.4% by the end of the fourth quarter of 2021, says Mortgage Bankers Association economist Joel Kan. The reason why we have an increasing rate path is driven by the expectations of stronger growth in the second half of the year.
The current economic uncertainty has kept mortgage rates from skyrocketing. The latest Bureau of Labor Statistics jobs report showed a slight decrease in the unemployment rate, to 6.3% in January. Underlying that number is the reality that over 10 million people remain unemployed.
Mortgage rates rising will likely have a bigger impact on your plans to refinance than it will on whether or not you can afford to purchase a home. There are other factors that heavily influence the homebuying process, such as the sellers market that were in.
Historically, rates have never been the deal breaker, Kan says. When it comes to such a big decision are going to adjust in other places to make sure the monthly payment is manageable.
Where rising rates will have the biggest impact is in homeowners decisions on whether or not its the right time to refinance. Refinancing really is driven by rates, primarily, Kan says. This past years record low mortgage rates created a massive surge in mortgage refinancing, which has slowed a bit, but still is up 46% year over year.
Mortgage Relief Programs For 2021
If youve had a temporary job loss or reduction in income, it can be hard to keep up with mortgage payments especially if you have an above-market mortgage rate thats keeping your payments artificially high.
The simple solution is to refinance into a lower interest rate and cheaper mortgage payment.
Thanks to rising home values, even homeowners who made a very small down payment or refinanced recently could be eligible for todays low-interest rates.
Even if you dont think youd qualify for a refinance, its worth talking to a lender. Many homeowners are eligible but dont know it yet.
Whats more, not everyone needs great credit or perfect finances to qualify for a refinance.
Select programs, like the government-backed Streamline Refinance, can help borrowers refinance with little, no, or negative home equity.
Even if you dont think youd qualify for a refinance, its worth talking to a lender.
Homeowners might be surprised at the amount of equity theyve gained in todays hot housing market. And with rates still near record lows, many borrowers can easily save hundreds every month.
Those savings could put some cushion back in your budget and seriously improve your personal finances.
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Who Is Eligible And How To Apply Explained
The fund is available for those who’ve experienced financial hardship after the pandemic initially hit the US.
To qualify, incomes must be 150% or less of the area median income or 100% of the median income for the US, whichever is bigger.
Plus, the homeowners mortgage balance must be less than $548,250.
How much you can get can vary by state and other factors, but qualifying households in Connecticut will be able to claim as much as $20,000.
While those in Illinois can soon apply for up to $30,000 per household.
According to the National Council of State Housing Agencies , states are working with the Treasury to finalize and implement their HAF programs “very soon”.
Some states are also using the funds they’ve received to set up pilot programs so they can start helping homeowners sooner.
To find out when your state is rolling out the support and how to get help, check the NCSHA website.
There is also another way to get mortgage relief – and thats through a federally-backed refinance program.