The CARES Act Mortgage Forbearance and Solutions for Servicers

CARES Act Mortgage Forbearance

About the CARES Act Mortgage Forbearance Options

The Coronavirus, Aid, Relief and Economic Security (CARES) Act does far more than just provide stimulus checks.  The CARES Act also has provisions to help those financially affected by the pandemic with their mortgage obligations.  All federally backed (Fannie Mae, Freddie Mac, USDA and VA) loans are eligible for a forbearance.  Additionally under the CARES act you have the right to request a forbearance from your servicer at any time.

CARES Act Mortgage Payment ReliefThe CARES Act states that you have a right to request a forbearance for up to 180 days initially, you can then ask for an extension of another 180 days.  A forbearance does not stop the scheduled interest you accrue though, and it does not forgive or erase the payments.  It is important to remember that you must pay all the skipped payments when the forbearance period ends.  Your servicer will work with you to determine how that repayment will happen.   It is also important to remember that even during the forbearance period you are still financially responsible for your mortgage.  It is also worth noting that there will be no additional fees, penalties or additional interest added to your account.  The servicer also cannot require you to submit additional qualifying documentation other than your pandemic related financial hardship.

Is Forbearance the Only Option?

If your loan is not federally backed, you may still have options and will need to contact your servicer to explore those options.  One of the options you may have is a deferral.  A deferral is usually limited to people who only owe one payment at the time of application.  A deferral can defer payments for a set length of time.  Unlike a forbearance you do not have to pay the deferred payments at the end of the deferral period, instead your loan maturity will be extended by the amount of the deferral.  So, it is in your benefit to contact your servicer as soon as you think you might be in financial distress and your mortgage may be untenable.

Steps We Are Taking to Aid Mortgage Servicers

There is no one easy solution for servicers to use to intake the flood of pandemic related requests for forbearance.  At Xede we have built our CARES Mortgage Intake solution to provide a quick and easy way for Salesforce enabled servicers to get up and running.

Xede CARES Act Mortgage Intake Form

Since there are no “guidelines” on what is or is not required for the program we had to draw on our deep industry knowledge of mortgage lending, strategic default, foreclosure, bankruptcy and more to build a solution that covered the needs of the borrower and the servicer.  With the CARES Mortgage Intake solution for Salesforce you can rest assured knowing that you are asking the right questions at the right time.  Our solution comes standard with two versions, one for Service Cloud and one for Financial Service Cloud enabled organizations.

Xede CARES ACT Mortgage Intake Report

With an easy to configure solution at their fingertip’s servicers can quickly intake new requests and ask the questions that are important to the organization.  COVID-19 has changed the way we live; we do business and how we communicate.  Make sure that you have a way to aid your borrowers in a quick and controlled manner with the CARES Mortgage Intake solution from Xede.

 

About the Author

Shane Hayes is the Directory of Industry Solutions at Xede.  He brings with him a wealth of knowledge from the financial services industries including mortgage lending, strategic default, insurance and more.  Shane is based out of Orlando, FL and is the founder of Florida Dreamin’ an all volunteer community led Salesforce conference.

Sources: https://www.consumerfinance.gov/about-us/blog/guide-coronavirus-mortgage-relief-options/

Shane Hayes
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