Federal and State Agencies Encourage Mortgage Servicers to Work With Struggling Homeowners Affected by COVID-19

(April 6, 2020) — On Friday, April 3, the federal financial institution regulatory agencies and the state financial regulators issued a joint-policy statement providing needed regulatory flexibility to enable the mortgage servicers to work with struggling consumers affected by the Coronavirus Disease (referred to as COVID-19) emergency. The actions announced by the agencies inform servicers of the agencies’ flexible supervisory and enforcement approach during the COVID-19 emergency regarding certain communications to consumers required by the mortgage servicing rules. The policy statement and guidance issued today will facilitate mortgage servicers’ ability to place consumers in short-term payment forbearance programs such as the one required by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). 

Under the CARES Act, borrowers in a federally backed mortgage loan experiencing financial hardship due, directly or indirectly, to the COVID-19 emergency, may request forbearance by making a request to their mortgage servicer and affirming that they are experiencing financial hardship during the COVID–19 emergency. In response, servicers must provide a CARES Act forbearance that allows borrowers to defer their mortgage payments for up to 180-days and possibly longer. 

View the entire press release​