CARES Act Provides Additional Loss Mitigation Options for FHA-Insured Homeowners
On April 1, 2020, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-06, FHA’s Loss Mitigation Options for Single Family Borrowers Affected by the Presidentially-Declared COVID-19 National Emergency in Accordance with the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This ML implements the mortgage forbearance provisions provided in the CARES Act that President Trump signed into law on March 27, 2020. Read the Press Release.
The loss mitigation options for borrowers experiencing a financial hardship negatively impacting their ability to make on-time mortgage payments due to the COVID-19 national emergency include:
- Availability of up to 6 months of mortgage payment forbearance for affected borrowers and an additional six-month period, if needed
- New COVID-19 national emergency stand-alone partial claim for eligible borrowers
- Extended certain due and payable, foreclosure, and claim timeframes for Home Equity Conversion Mortgages (HECM) affected by the COVID-19 national emergency
ML 2020-06 also informs servicers of the use of the new COVID-19 loss mitigation tools for borrowers impacted by the national emergency in place of the guidance on Presidentially-Declared Major Disaster Areas in FHA’s Single Family Housing Policy Handbook 4000.1.
Information for Mortgagees and Borrowers
FHA has launched a new consumer-oriented Q&A to help homeowners better understand what loss mitigation options are available to them during this national emergency. It is available on the Loss Mitigation Services for FHA Homeowners page.
Please direct all COVID-19 housing counseling questions to email@example.com or to your housing counseling agency’s HUD Point of Contact.