The mortgage borrowers most in need of information about relief options provided by the CARES Act, such as forbearance, are the ones who are least likely to know about it, according to a Fannie Mae report.
“Among all mortgage borrowers surveyed, those with lower incomes were more likely to be concerned about paying bills and were less familiar with relief options,” said Doug Duncan, Fannie Mae’s chief economist.
About 60% of mortgage borrowers with incomes of $50,000 a year or less said they weren’t familiar with or didn’t know about mortgage relief options, the report said. Among people with incomes above $50,000 a year, the share fell to 43%.
Every major home-loan servicer has information about forbearance on their websites, according to a HousingWire survey. The Consumer Financial Protection Bureau has information about relief options on its home page, including a link to a video explaining forbearance. And HousingWire is partnering with Freddie Mac to provide information to consumers through our Forbearance FAQ page.
The CARES Act, passed by Congress at the end of March, gives mortgage borrowers impacted by the COVID-19 pandemic the option of 180 days of forbearance, meaning suspended payments, with a provision they can re-up for another 180 days if the relief is still needed.
Anyone with a home loan backed by Fannie Mae, Freddie Mac, the Federal Housing Administration, the Veterans Administration, or the U.S. Department of Agriculture is eligible for forbearance – that covers more than half of all outstanding mortgages.
Borrowers aren’t required to prove anything to their servicers – they simply have to claim a pandemic-related financial hardship. And, they can’t be charged any fees or penalties, according to the law.
At the beginning of the pandemic, some of the largest mortgage servicers in the country were providing borrowers with “confusing and, at times, seemingly contradictory” information about forbearance, a federal watchdog said in a report at the end of April.
Some servicers of loans backed by the FHA were giving information about forbearance that was “incomplete, inconsistent, dated, and unclear,” the Department of Housing and Urban Development’s Office of the Inspector General said in an April 27 report, without citing the names of the companies.