The Consumer Financial Protection Bureau has established temporary special protections to help borrowers explore mortgage relief options, including loan modifications and selling their homes, before facing foreclosure.
These protections, in place Aug. 31, 2021 through Dec. 31, 2021, cover loans on primary residences and applies to
all mortgage loans, including privately held mortgage loans.
Generally, borrowers will have at least three options to avoid a potential foreclosure:
- Resume regular mortgage payments
- Lower monthly payments
- Sell the home
The bureau offers extensive consumer resources, such as how to contact HUD-approved housing counselors. Visit consumerfinance.gov/housing.
Contact your mortgage servicer as soon as possible to discuss what options may be available to avoid foreclosure
The Coronavirus Aid Relief and Economic Security (CARES) Act protects homeowners with federally backed mortgages facing financial difficulties resulting directly or indirectly from COVID-19. These protections include:
- The right to obtain a temporary reduction or a postponement (forbearance) of loan payments for up to 180 days
- The right to extend the forbearance plan for another 180 days, following the homeowners’ request
- Not reporting to credit reporting agencies as delinquent any temporary suspension or reduction of loan payments during the emergency declaration
- No late fees, additional charges, or changes in the terms of the loan are permitted while loans are in a forbearance plan
- For federally backed loans, lenders or loan servicers may not foreclose until Dec. 31, 2021
- For loans backed by Fannie Mae or Freddie Mac, lenders cannot foreclose until Dec. 31, 2021
Homeowners do not have to provide documentation to benefit from a forbearance plan, but they must attest that their financial difficulties are a direct or indirect result of COVID-19. Follow your servicer’s instructions about requesting a forbearance.