What if I can’t pay my mortgage due to COVID-19 (coronavirus)?

Many homeowners and landlords are facing economic uncertainty due to the effects of COVID-19. These uncertainties can make monthly mortgage obligations difficult to meet, but there may be temporary relief options available for those with federally backed mortgages.

Under the CARES Act, homeowners and owners of multi-family residential units with federally backed mortgages can postpone their payment obligations for periods ranging from 90 to 180-days. To initiate the forbearance of payments, a borrower need only make a request to their mortgage servicer stating they are experiencing financial hardship due to COVID-19.

During the forbearance period, interest will continue to accrue in accordance with the mortgage instrument, but no additional interest or fees may be applied. Unfortunately, it is unclear how the postponed payments will be treated after the forbearance period. Some servicers may require a lump-sum payment, while others may allow borrowers to tack the payments on to the end of their mortgage term.

Borrowers seeking relief from paying their mortgage are further protected by the foreclosure restrictions contained in the CARES Act. A servicer of a federally backed mortgage cannot initiate any foreclosure proceedings for a period of 60-days, which began on March 18, 2020. Additionally, multifamily borrowers receiving relief under the CARES Act are prevented from evicting most renters during the forbearance period.

Minnesota is currently working on its own legislation providing homeowners and renters with assistance during the COVID-19 emergency.

It is important for borrowers to be aware of the relief available to them during this pandemic, but it is also important they are conscious of the uncertainty that may accompany it.

© All Rights Reserved Rinke Noonan Ltd.

The information provided on this website is intended to be used as a source of general information and is not provided as legal advice. This information and content should not be considered legal advice used in resolving specific problems or questions, and may not constitute the most up-to-date legal or other information. No user of this site should act or refrain from acting on the basis of information on this site without first seeking legal advice from counsel. Access to this website does not create an attorney-client relationship between the user and the website authors, contributors, or Rinke Noonan Law Firm. Please contact the attorneys at Rinke Noonan Law Firm if you are interested in obtaining advice with respect to any particular legal matter.


Related Attorneys: Related Practice Areas: