This will give borrowers more time to explore their options when dealing with mortgage payments and other financial obligations.
This extension is designed to help struggling borrowers during this difficult economic time. The CFPB has provided a waiver for those who have not been able to make their payments or seek alternative assistance due to the financial crisis. This action comes as many borrowers are being faced with unemployment, underemployment, and other economic hardships.
Forbearance is an agreement between a borrower and a lender which allows the borrower to temporarily suspend or reduce their monthly payments without any late fees or penalties. The CFPB has extended the deadline for existing borrowers to request forbearance from May 17, 2021 to June 30, 2021. The extension applies to borrowers with qualified mortgages covered by the Real Estate Settlement Procedures Act (RESPA) or the Truth in Lending Act (TILA). This includes government-backed loans such as FHA, VA, USDA, Rural Development, and Conventional loans.
In addition to the extended deadline, the CFPB also waived certain restrictions so that borrowers can receive forbearance for up to 12 months. This provides additional financial relief to borrowers who need it most. Borrowers should be aware that this period may be extended beyond 12 months depending on their individual circumstances.
The CFPB encourages borrowers to contact their mortgage servicer to discuss their circumstances and explore payment alternatives. Borrowers should also take advantage of the resources available to them, such as forbearance or refinancing options, to help them manage their financial hardship.
The CFPB’s extension of the deadline for forbearance requests on government-backed loans is a helpful step in providing economic relief to struggling borrowers during this difficult time. By allowing more time to explore their options, borrowers can receive the help they need without incurring late fees or penalties. This extends the period of forbearance beyond the usual 12 months, giving borrowers additional time to find a solution for their situation. The CFPB encourages borrowers to contact their mortgage servicer to discuss their circumstances and take advantage of the resources available to them.
The CFPB’s extension of the deadline for forbearance requests on government-backed loans provides much-needed relief and assistance to struggling borrowers during this trying economic time. The extension gives borrowers more time to explore their options and find a suitable solution for their financial hardship, without risking late fees or penalties. Forbearance can provide temporary relief for those facing unemployment, underemployment, and other economic hardships. The CFPB encourages borrowers to contact their mortgage servicer for more information and take advantage of the resources available to them.
This article was contributed on Aug 02, 2023
